Exhibit 10.14
CHANGE OF CONTROL AGREEMENT
This Agreement, made and entered into as of the 8th day of January,
1999 by and between _________________ (the "Executive") of ________, New
Hampshire and Pennichuck Corporation (the "Corporation"), a New Hampshire
corporation with principal offices in Nashua, New Hampshire.
WHEREAS, the Executive presently serves as the ________________ of the
Corporation, the _________________ of its subsidiaries ___________________
and ___________________, and the ___________________ of its subsidiaries
_______________ and _________________, as such positions may be revised from
time-to-time by action of the Board of Directors of the Corporation or a
committee thereof having authority with respect to such appointment;
WHEREAS, the Corporation wishes to assure the continued availability of
the Executive's services and to create an environment which will promote the
Executive's giving impartial and objective advice in any circumstances
resulting from the possibility of a Change of Control of the Corporation (as
herein defined); and
WHEREAS, the Corporation and the Executive wish to provide the
Executive with financial protection in the event significant changes in the
Executive's employment status occur following a Change of Control of the
Corporation.
NOW THEREFORE, the Corporation and the Executive, in consideration of
the terms and conditions set forth herein and other valuable consideration,
receipt of which is hereby acknowledged, mutually covenant and agree as
follows:
ARTICLE I
TERM
The term of this Agreement shall be for the period commencing on
January 8, 1999 ("Effective Date") and ending three (3) years from the
Effective Date, unless the Executive's employment is sooner terminated as
provided in Section 7.1 hereof ("Term"). Commencing on or about the first
anniversary of the Effective Date and on or about each subsequent anniversary
of the Effective Date, the Term of this Agreement shall automatically be
extended for an additional one (1) calendar year period, and the provisions
hereof shall remain applicable for each such subsequent three-year period,
unless either party gives written notice to the other, not later than each
anniversary of the Effective Date, that it or he does not concur in such
extension.
ARTICLE II
PAYMENTS UPON CHANGE OF CONTROL AND TERMINATION EVENT
The Corporation shall make payments to the Executive as provided for in
Article IV hereof upon the occurrence of both a Change of Control of the
Corporation and a Termination Event, as such terms are defined in Article III
hereof.
ARTICLE III
DEFINITIONS
(a) "Base Amount" shall mean an amount equal to the Executive's
current annual base salary of $__________ , as adjusted from time-to-time by
the Board of Directors or a committee thereof having authority with respect
to the Executive's annual compensation.
(b) A "Change of Control" shall be deemed to have occurred if any of
the following have occurred:
(i) any individual, corporation (other than the Corporation),
partnership, trust, association, pool, syndicate, or any other entity
or any group of persons acting in concert becomes the beneficial owner,
as that concept is defined in Rule 13d-3 promulgated by the Securities
Exchange Commission under the Securities Exchange Act of 1934, as a
result of any one or more securities transactions (including gifts and
stock repurchases but excluding transactions described in subdivision
(ii) following) of securities of the Corporation possessing fifty-one
percent (51%) or more of the voting power for the election of directors
of the Corporation;
(ii) there shall be consummated any consolidation, merger or
stock-for-stock exchange involving securities of the Corporation in
which the holders of voting securities of the Corporation immediately
prior to such consummation own, as a group, immediately after such
consummation, voting securities of the Corporation (or if the
Corporation does not survive such transaction, voting securities of the
corporation surviving such transaction) having less than fifty percent
(50%) of the total voting power in an election of directors of the
Corporation (or such other surviving corporation);
(iii) "approved directors" shall constitute less than a majority
of the entire Board of Directors of the Corporation, with "approved
directors" defined to mean the members of the Board of Directors of the
Corporation as of the date of this Agreement and any subsequently
elected members of the Board of Directors of the Corporation who shall
be nominated or approved by a majority of the approved directors on the
Board of Directors of the Corporation prior to such election; or
(iv) there shall be consummated any sale, lease, exchange or
other transfer (in one transaction or a series of related transactions,
excluding any transaction described in subdivision (ii) above), of
all, or substantially all, of the assets of the Corporation or its
subsidiaries to a party which is not controlled by or under common
control with the Corporation.
(c) A "Termination Event" shall be deemed to have occurred if, within
the twelve month period following a Change of Control: (i) the Executive
experiences the loss of his position by reason of discharge or demotion, for
reasons other than termination or demotion for good cause, or (ii) the
Executive voluntarily resigns his position following the substantial
withholding, substantial adverse alteration or substantial reduction of
responsibility, authority, or compensation (including any compensation or
benefit plan in which the Executive participates or substitute plans adopted
prior to the Change of Control) to which the Executive was charged or
empowered with or entitled to immediately prior to a Change of Control of the
Corporation or to which he would normally be charged or empowered with or
entitled to from time to time by reason of his office, for reasons other than
good cause.
(d) "Good cause" shall mean: (i) the willful or continued failure
by the Executive to perform his duties for the Corporation or a subsidiary
(other than such failure resulting from the Executive's incapacity due to
physical or mental illness), after a written demand for performance is
delivered to the Executive by the President of the Corporation or the
applicable subsidiary (or the respective Board of Directors if the
Executive then serves in the capacity of president thereof) which
specifically identifies the manner in which the President (or, as the case
may be, the Board) believes the Executive has not performed his duties;
(ii) an act or acts intended to result in personal enrichment at the
material expense of the Corporation or a subsidiary; or, (iii) an act or
acts of dishonesty taken by the Executive or of willful misconduct which
are materially injurious to the Corporation or a subsidiary.
ARTICLE IV
CASH PAYMENTS
Upon the occurrence of both a Change of Control of the Corporation and
a Termination Event, the Corporation shall, immediately upon the occurrence
of the Termination Event, make a lump sum payment (less applicable
withholdings) to the Executive in an amount that equals one (1) times the
Base Amount; provided that, in consideration thereof, the Executive executes
and delivers to the Corporation, in form and content acceptable to the
Corporation, a release of all claims and causes of action the Executive has
or may ever have against the Corporation arising from his employment and
under this Agreement.
ARTICLE V
DEATH OF EXECUTIVE
If the Executive dies before receiving the payment due to him under
this Agreement, the Corporation shall pay to the Executive's designated
beneficiary, or failing such designation, to the estate of the Executive, one
(1) lump sum payment in an amount equal to the amount determined pursuant to
Article IV hereof.
ARTICLE VI
INDEMNIFICATION
The Executive shall be entitled, at all times, to the benefit of the
maximum indemnification and advancement of expenses available from time to
time under the Corporation's Articles of Incorporation and Bylaws, and under
the laws of the State of New Hampshire. Such indemnification shall survive
the termination of the Executive's employment with the Corporation and the
termination of this Agreement unless such termination is for "good cause" (as
that term is defined in Article III above). In addition, the Corporation
shall have in full force and effect an officers' liability insurance policy
providing such coverages, exclusions and deductibles as the Corporation and
the Executive shall reasonably agree and as is available on a reasonable
premium basis.
ARTICLE VII
EMPLOYMENT
7.1 No Right to Continued Employment. This Agreement shall not confer
upon the Executive any right with respect to continuance of employment by the
Corporation or any subsidiary, nor shall it interfere in any way with the
right of his employer to terminate his employment at any time. No payments
hereunder shall be required except upon the occurrence of both a Change of
Control of the Corporation and a Termination Event as set forth in Article
III herein. Thus, except as specifically provided in Article II herein, no
payments hereunder shall be made on account of termination of the Executive's
employment (i) upon the Executive's death, disability or retirement, (ii) by
the Corporation with or without cause or (iii) upon the Executive's voluntary
termination.
7.2 No Duty to Seek Other Employment. Amounts payable to the
Executive under this Agreement shall not be reduced by the amount of any
compensation received by the Executive from any other employer or source, and
the Executive shall not be under any obligation to seek other employment or
gainful pursuit as a result of this Agreement.
ARTICLE VIII
OTHER BENEFITS
8.1 Health Insurance Benefits. Upon the occurrence of a Termination
Event following a Change of Control, the Executive shall be entitled to
continuation of health insurance benefits as defined by federal ("COBRA") and
state law. If the Executive or any qualified beneficiaries elect COBRA
continuation coverage, the Corporation agrees to maintain, or reimburse, the
Executive or his/her qualified beneficiary for the cost of continuation of
coverage for a period of 12 months. After the 12 months has expired, the
Executive and/or his qualified beneficiaries shall be responsible for paying
the premiums in a timely manner for the remaining COBRA period.
8.2 Life Insurance Benefits. For a period of 12 months following the
date of the occurrence of a Termination Event following a Change of Control,
the Corporation agrees to maintain, or to directly reimburse the Executive
for the cost of, the Executive's eligibility for and participation in any
life insurance plans provided by the Corporation upon the same basis and cost
as prior to the Termination Event.
ARTICLE IX
REDUCTION OF PAYMENTS
In the event any of the payments made under this Agreement would be
considered an "excess parachute payment" as defined in Section 280G of the
Internal Revenue Code of 1986, as amended, then there shall be a reduction in
the amount otherwise payable under this Agreement such that all payments are
deductible by the Corporation.
ARTICLE X
ARBITRATION
Any dispute, controversy or claim arising out of or relating to this
Agreement shall be settled by arbitration conducted in Nashua, New Hampshire
or other mutually agreeable location in the State of New Hampshire. The
matter will be heard promptly by a single arbitrator selected by mutual
agreement by the Corporation and the Executive. Should the Corporation and
the Executive be unable to agree upon an arbitrator within a 30-day period,
an arbitrator will be selected in accordance with the commercial arbitration
rules of the American Arbitration Association. Unless the parties mutually
agree otherwise, once appointed, the arbitrator will make all rulings on
procedural and evidentiary matters and will determine the date, time and
place of any hearings. The arbitrator shall have no power to add to,
subtract from, modify or disregard any of the provisions of this Agreement.
The arbitrator's decision shall be consistent with the specific terms of this
Agreement. The arbitrator will issue a written decision within 30 days of
the hearing or submission to him. The arbitrator's decision will be final and
binding on all parties.
In the event a Change of Control of the Corporation and a Termination
Event occur and the Executive demands arbitration under the provisions of
this Agreement, the Corporation agrees to share equally the cost of the
arbitrator. If the arbitrator substantially upholds the Executive's
grievance, then the Corporation shall reimburse the Executive for all costs
and expenses reasonably incurred by him in such action or proceeding,
including reasonable attorneys' fees.
ARTICLE XI
MISCELLANEOUS
11.1. Entire Agreement. This Agreement constitutes the entire
agreement between the parties, relating to the subject matter hereof and
replaces all prior agreements relating to said subject matter.
11.2. Governing Law. This Agreement shall be governed by and is to be
construed and enforced in accordance with the laws of the State of New
Hampshire.
11.3. Waivers and Modifications; Termination. This Agreement may not,
in whole or in part, be waived, changed, amended, discharged or terminated
orally or by any course of dealing between the parties, but only by an
instrument in writing signed by the parties hereto. No waiver by either
party of any breach by the other of any provision hereof shall be deemed to
be a waiver of any later or other breach hereof or as a waiver of any other
provision of this Agreement. This Agreement shall terminate as of the time
the Corporation makes the final payment which it may be obligated to pay
hereunder or provides the final benefit which it may be obligated to provide
hereunder.
11.4. Severability. In any case any one or more of the provisions
contained in this Agreement for any reason shall be held to be invalid,
illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision of this Agreement, but
this Agreement shall be construed as if such invalid, illegal or
unenforceable provisions had never been contained herein.
11.5. Counterparts. This Agreement may be made and executed in
counterparts, each of which shall constitute an original for all purposes.
11.6. Section Headings. The descriptive section headings herein have
been inserted for convenience only and shall not be deemed to define, limit,
or otherwise affect the construction of any provision hereof.
11.7 Notices. Any notice or other communication pursuant to this
Agreement shall be in writing and shall be deemed to have been given or made
when personally delivered, or when mailed by registered or certified mail,
postage prepaid, return receipt requested, to the other party. In the case
of the Corporation, any such notice shall be delivered or mailed to its
principal office. In the case of the Executive, any such notice shall be
delivered in person or mailed to his last known address as reflected in the
records of the Corporation.
11.8 Assignment. The Executive acknowledges that the services to be
rendered by him are unique and personal. Accordingly, the Executive may not
assign any of his rights or delegate any of his duties or obligations under
this Agreement or otherwise assign this Agreement. The rights and
obligations of the Corporation under this Agreement shall inure to the
benefit of, and shall be binding upon, the successors and assigns of the
Corporation.
11.09 Confidential Information. At all times during and after his
employment with the Corporation, the Executive shall treat as confidential
and shall not divulge, furnish or make known to or accessible to, or use for
the benefit of anyone other than the Corporation, any confidential
information concerning the Corporation obtained during the course of the
Executive's employment. Confidential information includes, but is not
limited to: ideas, inventions, discoveries, developments, processes,
designs, formulas, patterns, devices, programs, methods, techniques,
compilations of scientific, technological or business information,
proprietary information, and trade secrets. The Executive agrees that during
the term of and following the termination of his employment with the
Corporation, he will not disclose to any person or use in any way any such
confidential information, other than (i) information that is generally known
in the Corporation's industry or acquired from public sources, (ii) as
required by any court, supervisory authority, administrative agency or
applicable law, or (iii) with the prior written consent of the Corporation.
11.10 Authorization. The Corporation represents and warrants that the
execution of this Agreement has been duly authorized by requisite action of
the Board of Directors of the Corporation.
IN WITNESS WHEREOF, the parties have executed this Agreement on the day
and year first written above.
WITNESS: PENNICHUCK CORPORATION
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By:
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Name:
Its:
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Executive:
