EMPLOYMENT AGREEMENT
between
AQUARION COMPANY
and
XXXXXXX X. XXXXXXXX
dated as of April 23, 1999
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THIS AGREEMENT, made effective April 23, 1999 by and
between AQUARION COMPANY (the ACompany@), a Delaware corporation, and Xxxxxxx X.
Xxxxxxxx of 00 Xxxxx Xxxxx Xxxx, Xxxxxxxxxx, Xxxxxxxxxxx, 00000
(the "Executive").
W I T N E S S E T H T H A T :
WHEREAS:
1. The Executive is a principal officer of the Company
and an integral part of its
senior management who participates in the decision making process relative to
short and long term
planning and policy for the Company;
2. The Board of Directors of the Company, at its meeting
on December 15, 1998,
determined that it would be in the best interests of the Company and its
shareholders to enter into an
employment agreement to retain the services of the Executive; and
3. The Executive is willing to serve the Company as a
member of its management on
the terms and conditions set forth herein;
NOW, THEREFORE, it is hereby agreed by and between the parties
hereto as follows:
1. Employment. The Company agrees to continue the
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Executive in its employ, and
the Executive agrees to remain in the employ of the Company, for the period
stated in Paragraph 3 hereof
and upon the other terms and conditions herein provided.
2. Position and Responsibilities. During the period of
employment hereunder, the
Executive agrees to serve the Company as Vice President, Administration and
Human Resources and as Vice
President and Chief Operating Officer of Bridgeport Hydraulic Company
("Hydraulic"), reporting directly
to the Chief Executive Officers of the Company and Hydraulic, respectively,
with such duties and responsibilities, consistent with such position, as the
respective
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Boards of Directors or the Chief
Executive Officers may from time to time determine. During said period,
the Executive also agrees to
serve, if elected, as an officer and director of any other subsidiary or
affiliate of the Company.
3. Term and Duties.
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(a) Term of Employment. The term of the Executive"s
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employment under this
Agreement shall be deemed to have commenced as of the date first above written
and shall continue until April 22, 2000, subject to extension as hereinafter
provided. On the first day of each month following
the date first above written, the term of the Executive=s employment under this
Agreement shall be
automatically extended unless prior thereto the Company shall deliver to the
Executive or the Executive
shall deliver to the Company written notice that such term of employment shall
not be extended, in which
case such term shall end at the expiration of the then existing term of
employment under this Agreement,
including any previous extensions, and shall not be further extended except by
agreement of the Company
and the Executive. Any such automatic extension shall be for one additional
full calendar month (for a
total term upon such extension of twenty-four full calendar months), unless the
Executive will attain
age 65 prior to completion of twenty-four full calendar months following the
extension date, in which
case the term of the Executive=s employment under this Agreement shall
terminate on the last day of the
month in which the Executive attains age 65.
(b) Duties. During the period of employment
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hereunder and except for illness
or incapacity and reasonable vacation period (which shall not be less than 20
days in any calendar
year), the Executive's business time, attention, skill and efforts shall be
exclusively devoted to the
business and affairs of the Company and its subsidiaries; provided, however,
that
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nothing in this Agreement shall preclude the Executive from devoting time
during reasonable periods required for:
(i) serving as an officer, director or member of a
committee of any company or organization involving no
conflict of interest with the Company or any of
its subsidiaries or affiliates,
(ii) delivering lectures and fulfilling speaking
engagements, and
(iii) engaging in charitable and community activities,
provided that such activities do not materially
affect or interfere with the performance
of the Executive=s obligations to the Company.
4. Compensation.
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(a) For all services rendered by the Executive in
any capacity during
employment under this Agreement, including services as an executive, officer,
director, or member of any
committee of the Company or any subsidiary or affiliate thereof, the Company
shall pay the Executive a base salary at the rate of not less than $160,000
per year, subject to such periodic increases as the
Board of Directors of the Company, or a committee designated by said
Board, shall deem appropriate in
accordance with the Company=s customary procedures and practices
regarding the salaries of Company
officers. Such salary shall be payable in accordance with the
customary payroll practices of the
Company, but in no event less frequently than monthly. Such periodic
increases in salary, once granted,
shall not be subject to revocation.
(b) Executive shall be entitled to participate
in any Company incentive or
bonus plan covering some or all of its executive officers that
is in effect during the period of his
employment hereunder and to receive benefits thereunder on a
basis consistent with the overall
administration and intent of any such plan and with past practice,
if any, under such plan.
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(c) Nothing in this Agreement shall
preclude or affect any rights or benefits
that may now or hereafter be provided for the Executive or for which
the Executive may be or become
eligible under any other form of compensation or employment benefit
plan now existing or that may
hereafter be adopted or awarded by the Company. Specifically,
the Executive shall:
(i) participate in the Company=s Retirement Plan
for Employees of Aquarion Company as well as any related program
under any "excess benefit plan" that may be adopted during the
period of the Executive's employment hereunder and in which the
Executive is designated by the Company's Board of Directors to
participate (hereinafter referred to collectively as the "Retirement Program");
(ii) participate to the permitted extent the
Executive wishes in The Employee Savings and Investment Plan of the
Company and the related program under any excess benefit plan
(hereinafter referred to collectively as the "Thrift and Savings Program");
(iii) participate in the salary continuation program
in the event of death in accordance with Board policy for Company officers;
(iv) participate in the Company=s death and disability
benefit plans and its medical, dental and health and welfare plans; and
(v) participate in equivalent successor plans of
the Company for which senior management employees are eligible;
provided, however, that, subject to Paragraph 7(c)(iv), nothing in this
Agreement shall preclude the
Company from amending or terminating any such plan or program, on the
condition that such
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amendment or termination is applicable to all of the Company's
senior management employees generally.
5. Business Expenses. The Company shall pay or
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reimburse the Executive for all reasonable travel and other expenses
incurred in connection with the performance of the Executive's
duties under this Agreement in accordance with such procedures
as the Company may from time to time
establish. The Company further agrees to furnish the Executive
with a private office and a private
secretary and such other assistance and accommodations, including an
automobile and appropriate club
membership, as shall be suitable to the character of the
Executive's position with the Company and
adequate for the performance of the Executive=s duties under this Agreement.
6. Additional Benefits. Nothing in this Agreement
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shall affect the Executive's
eligibility to participate in all group health, dental,
hospitalization, life, travel or accident or
other insurance plans or programs and all other perquisites, fringe
benefits or retirement plans or
additional compensation, including termination pay programs, which the
Company may hereafter, in its
sole and absolute discretion, elect to make available to its
senior management employees generally, and
the Executive shall be eligible to receive, during the period of
employment under this Agreement, all
benefits and emoluments for which key employees are eligible under
every such plan, program, perquisite
or arrangement to the extent permissible under the general
terms and provisions thereof.
7. Termination of Employment. Notwithstanding
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any other provision of this
Agreement, the Executive=s employment under this Agreement may be terminated:
(a) by the Company, in the event of the
Executive's serious, willful
misconduct in respect of the Executive=s duties under this Agreement,
including conviction for a
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felony or perpetration of a common law fraud which has
resulted or is likely to result in material economic
damage to the Company or any of its subsidiaries, by written notice
to the Executive, specifying the event relied upon for such termination;
(b) by either the Company or the Executive,
if the Executive accepts
employment or a consulting position with another company; or
(c) by the Executive, in the event of any (i)
material change by the Company
of the Executive=s functions, duties or responsibilities, which
change would cause his position with the
Company to become of less dignity, responsibility, importance
or scope from the position and attributes
thereof described in Paragraph 2 above, (ii) assignment or
reassignment by the Company or by one of its
subsidiaries of the Executive to another place of employment
outside of Fairfield County, Connecticut,
(iii) liquidation, dissolution, consolidation, or acquisition or
merger of the Company, or transfer of
all or substantially all of its assets other than a transaction in
which a successor corporation with a
net worth at least equal to that of the Company assumes this
Agreement and all obligations and
undertakings of the Company hereunder, or (iv) reduction
in the Executive's total compensation and
benefits, as specified in Paragraph 4 above and as currently provided,
or other material breach of this
Agreement by the Company or any of its subsidiaries, by thirty
(30) days written notice to the Company,
specifying the event relied upon for such termination and given
within 180 days after such event.
8. Payments Upon Termination of Employment.
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In the event of any termination by
the Executive pursuant to Paragraph 7(c) above, or in the event the
Executive's employment under this
Agreement is terminated by the Company for any reason other than
one of those specified in
Paragraphs 7(a) or 7(b) above, the Company shall, as liquidated
damages or
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severance pay, or both,
promptly pay to the Executive and provide the Executive and the
dependents, beneficiaries and estate of
the Executive as follows:
(a) The Company shall pay the Executive,
at his option, either as a lump sum
or in equal monthly installments over the unexpired portion of the
term of employment provided for in
Paragraph 3(a) above, a cash amount equal to the present value of the
excess of (i) the salary provided
in Paragraph 4(a) above, as in effect at the time of termination, for a
period of 12 months (commencing
with the month in which termination shall have occurred) less the
amounts, if any, the Executive would
have paid in cash in respect of employee benefits provided for in
Paragraph 4(c)(iv) above if the Executive were still employed,
over (ii) the amounts, if any, paid to the Executive pursuant to any
severance or termination pay program or arrangement of the Company or
any of its subsidiaries.
(b) The Company shall also pay the Executive a
lump sum cash amount equal to
the present value of the excess of (i) the aggregate benefit that
would have been paid under the
Retirement Program described in paragraph 4(c)(i) above as in effect
on the date first above written, if
the Executive had continued to be employed and to be entitled to
service credit for eligibility and
benefit purposes during the unexpired portion of the term of employment
provided for in Paragraph 3(a)
above, at an annual rate of compensation equal to that used to
calculate the payments provided by
Paragraph 8(a) above, calculated on the basis of the higher of the Executive's
salary for the 12 months
immediately preceding the month in which termination shall have
occurred or the compensation amount used
in the benefit formula under said Retirement Program, and assuming
that the Executive is fully vested in
such benefit, or (ii) the aggregate benefit actually payable
under the Retirement Program and any
successor retirement program of the Company consisting of a
tax-qualified pension plan and a related
excess benefit
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plan. In clarification of the immediately
preceding sentence, the aggregate benefit that
would have been paid under the Retirement Program shall be calculated
as of the normal or early
retirement date for which the Executive would have qualified,
assuming the Executive were still employed
on that date and were fully vested in such benefit, and which
would produce the highest present value.
(c) The Company shall also pay the Executive
a lump sum cash amount equal to
the present value of the aggregate contributions or payments, if any, that
would have been made by the
Company or any of its subsidiaries under the Thrift and Savings Program
described in Paragraph 4(c)(ii)
above, or any successor program of the Company in effect on the date on
which termination shall have
occurred, if the Executive had continued to be employed, and to
participate in the Thrift and Savings
Program or such successor program to the same extent as the Executive
participated for the last month
during which the Executive was permitted to participate, during the
unexpired portion of the term of
employment provided for in Paragraph 3(a) above, at an annual
rate of compensation equal to that used to
calculate the payments provided in Paragraph 8(a) above.
(d) For purposes of calculating the lump such
cash payments provided in Paragraphs 8(a), (b) and (c) above,
present value shall be determined by using a discount factor equal
to one percentage point below the prime rate as published in The Wall
Street Journal as of the date on
which termination shall have occurred.
(e) For a period of 24 months (commencing
with the month in which termination
shall have occurred), the Executive shall continue to be entitled
to all employee benefits provided for
in paragraph 4(c)(iv) above, as if the Executive were still
employed during such period under this
Agreement, with benefits based upon the compensation used to
calculate
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the payments provided by
Paragraph 8(a) above, and if and to the extent that such benefits
shall not be payable or provided under
any such plan, the Company shall pay or provide such
benefits on an individual basis. The medical,
dental, health and welfare benefits provided for in Paragraph 4(c)(iv)
above, in accordance with this
Paragraph 8(e) shall be secondary to any comparable benefits provided
by another employer provided that
an appropriate refund is made of any reduction in the amount
paid pursuant to Paragraph 9(a)(i) which
had assumed that such benefits would be primary.
9. Source of Payments; Interest. All payments
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provided for in Paragraphs 4, 5, 6
and 8 above shall be paid in cash from the general funds of the Company.
Any payments not made within
thirty (30) days after termination or such time as they may otherwise be
due hereunder shall bear
interest at the interest rate used to establish the discount factor
provided for in Paragraph 8(d). The
Company shall not be required to establish a special or separate
fund or other segregation of assets to
assure such payments.
10. Litigation Expense.
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(a) In the event of any litigation or other
proceeding between the Company and
the Executive with respect to the subject matter of this Agreement and
the enforcement of rights
hereunder, the Company shall reimburse the Executive for all reasonable
costs and expenses relating to
such litigation or other proceeding, including reasonable attorneys'
fees and expenses, provided that
such litigation or proceeding results in any
(i) settlement requiring the Company to make
a payment to the Executive, or
(ii) judgment or order in favor of the Executive
enforcing any provision of this Agreement or awarding any payment or other
consideration
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to the Executive, regardless of whether such judgment or order is
subsequently reversed on appeal or in a collateral proceeding.
In no event shall the Executive be required to reimburse the Company for
any of the costs and expenses
relating to such litigation or other proceeding. The obligation of the
Company under this Paragraph 10
shall survive the termination for any reason of this Agreement
(whether such termination is by the
Company, by the Executive, upon the expiration of this Agreement or otherwise).
11. Income Tax Withholding. The Company may withhold
----------------------
from any payments made under
this Agreement all Federal, State, City or other taxes as shall be
required pursuant to any law or governmental regulation or ruling.
12. Entire Understanding. This Agreement
--------------------
contains the entire understanding between
the Company and the Executive with respect to the subject matter hereof
and supersedes any prior
employment agreement between the Company and the Executive, except that
this agreement shall not affect
or operate to reduce any benefit or compensation inuring to the
Executive of a kind elsewhere provided
and not expressly provided in this Agreement.
13. Severability. If, for any reason, any one or
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more of the provisions or part of
a provision contained in this Agreement shall be held to be
invalid, illegal or unenforceable in any
respect, such invalidity, illegality or unenforceability shall
not affect any other provision or part of
a provision of this Agreement not held so invalid, illegal or unenforceable,
and each other provision or
part of a provision shall to the full extent consistent with law
continue in full force and effect. If
this Agreement is held invalid or cannot be enforced, then to the full
extent permitted by law any prior
agreement between the Company and the Executive shall be deemed reinstated
as if this Agreement had not
been executed.
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14. Consolidation, Merger, or Sale of Assets.
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Nothing in this Agreement shall
preclude the Company from consolidating or merging into or with, or
transferring all or substantially
all of its assets to, another corporation or acquiring entity which
assumes this Agreement and all obligations and undertakings of the
Company hereunder. Upon such a consolidation, merger or transfer of
assets and assumption, the term, Athe Company@, as used herein
shall mean such other corporation or
acquiring entity and this Agreement shall continue in full force and effect.
15. Notices. All notices, requests, demands
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and other communications required or
permitted hereunder shall be given in writing and shall be deemed to
have been duly given if delivered
or mailed, postage prepaid, first class as follows:
(a) to the Company:
Aquarion Company
000 Xxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxxx 00000
Attention: Secretary
(b) to the Executive:
Xxxxxxx X. Xxxxxxxx
00 Xxxxx Xxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxxxxx 00000
or to such other address as either party shall have previously specified
in writing to the other.
16. No Attachment. Except as required by law,
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no right to receive payments under
this Agreement shall be subject to anticipation, commutation,
alienation, sale, assignment,
encumbrances, charge, pledge, or hypothecation or to execution,
attachment, levy, or similar process or
assignment by operation of law, or any attempt, voluntary or
involuntary, to effect any such action
shall be null, void and of no effect.
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17. Binding Agreement. This Agreement shall be
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binding upon, and shall inure to
the benefit of, the Executive and the Company and their respective
permitted successors and assigns.
18. Modification and Waiver. This Agreement
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may not be modified or amended except
by an instrument in writing signed by the parties hereto. No term or
condition of this Agreement shall
be deemed to have been waived, nor shall there be any estoppel against the
enforcement of any provision
of this Agreement except by written instrument signed by the party charged
with such waiver or estoppel.
No such written waiver shall be deemed a continuing waiver unless
specifically stated therein, and each
such waiver shall operate only as to the specific term or condition
waived and shall not constitute a waiver of such term or condition for
the future or as to any act other than that specifically waived.
19. Headings of No Effect. The paragraph headings
---------------------
contained in this Agreement are
included solely for convenience of reference and shall not in any way
affect the meaning or
interpretation of any of the provisions of this Agreement.
20. Governing Law. This Agreement and its validity,
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interpretation, performance,
and enforcement shall be governed by the laws of the State of Connecticut.
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IN WITNESS WHEREOF, the Company has caused this Agreement to
be executed and its seal to be affixed hereunto by its officers thereunto duly
authorized, and the Executive has signed this Agreement, all as of the date
first above written.
ATTEST: AQUARION COMPANY
By______________________________
______________________________ Name:
Secretary Title:
By______________________________
Xxxxxxx X. Xxxxxxxx
