EMPLOYMENT AGREEMENT
AGREEMENT dated as of December 1, 1995, 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 Agreement and Duties.
(a) 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 for a
period of at least sixty (60) full calendar months thereafter,
subject to renewal in accordance with Section 3(b) below.
(b) One-Year Evergreen Provision. This Agreement shall be
reviewed annually by the Board at its meeting held for the review
of compensation and in all events prior to December 1 of each
year. At such yearly review, the Board shall consider whether or
not to extend the term of this Agreement for an additional year.
Unless the Board affirmatively votes not to extend this
Agreement, the term of employment and the termination of this
Agreement shall be extended for a period of one year from the
previous termination date. In the event the Board votes not to
extend this Agreement, the termination date of this Agreement
shall be the later of the expiration of sixty (60) months from
the effective date of this Agreement or sixty (60) months from
December 1st of the year in which this Agreement was last
extended.
(c) Duties. During such period of his employment
hereunder, except for illness, vacation periods, and reasonable
leaves of absence, the Executive shall devote substantially all
of his business time, attention, skill and efforts to the
faithful performance of his duties. With the approval of the
Board, however, the Executive may serve, or continue to serve, on
the boards of directors of, and hold any other offices or
positions in, companies or organizations, when, in the Board's
judgment, that service will not conflict with the interests of
the Company or any of its subsidiaries or affiliates or divisions
or materially affect the performance of the Executive's duties
pursuant to this Agreement.
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 one hundred ninety six thousand dollars ($196,000)
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 dated November 30, 1993, as
amended or replaced, six thousand dollars ($6,000) per year or
such higher 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; 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 on the same basis as other
officers 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 policies. 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 policies and at the time the Executive elects to retire
under the provisions of the Pension Plan 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 semimonthly 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 then existing policies.
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, 1988 (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:
Director 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: Xxxxxx X. Xxxxx
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Xxxxxx X. Xxxxx
Chairman, Board of
Directors
Xxxxxx X. Xxxxxxxx
------------------
Xxxxxx X. Xxxxxxxx
