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EXHIBIT - 10.1
EXECUTIVE EMPLOYMENT AGREEMENT
AN EXECUTIVE EMPLOYMENT AGREEMENT ("Agreement"), dated this 1st day of
January 2001, by and between Chesapeake Utilities Corporation, a Delaware
corporation (the "Company"), and Xxxxx X. Xxxxxx ("Executive").
WITNESSETH:
WHEREAS, the Company is currently obtaining the benefit of Executive's
services as a part-time executive employee in the capacity of Chairman of the
Company's Board of Directors ("Chairman") under an Executive Employment
Agreement, dated January 1, 1999;
WHEREAS, the Company's Board of Directors (the "Board") has authorized
the Company to agree to provide for Executive's continued employment on the
terms set forth in this Agreement; and
WHEREAS, Executive is willing, in consideration of the covenants
hereinafter provided, to continue to be employed by the Company in the capacity
of Chairman and to render services incident to such position during the term of
this Agreement.
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein, the Company and Executive hereby agree as follows:
1. Employment. The Company agrees to employ Executive, and
Executive agrees to accept employment, as an executive officer of the Company in
the capacity of Chairman, with such reasonable duties and responsibilities as
are consistent with the By-laws of the Company, as of the date hereof, and the
Position Description dated January 1, 2001, appended to this Agreement.
2. Term of Agreement. The term of Executive's employment under this
Agreement (the "Term") shall extend until December 31, 2002, unless such
employment is earlier terminated (i) by either the Company or Executive upon 90
days prior written notice to the other or (ii) otherwise accordance with the
provisions of Section 8.
3. Time. Executive agrees to devote one-half of a full-time work
schedule and, during that time, his full best efforts for the benefit of the
Company and its subsidiaries, and not to serve any other business enterprise or
organization in any capacity during the Term, without the prior written consent
of the Company, which consent shall not be unreasonably withheld.
4. Office. During the Term, Executive shall serve as the Company's
Chairman.
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5. Compensation. During the Term, the Company shall compensate
Executive for his services hereunder at a rate of $XXXXX per annum, payable in
equal semimonthly installments, or such greater or lesser amount as the Board
may determine ("Base Compensation"). The Base Compensation rate shall be
reviewed annually and may be increased or decreased from time to time.
6. Expenses. During the Term, the Company shall pay all necessary
and reasonable business expenses incurred by Executive on behalf of the Company
in the course of his employment under this Agreement, including, without
limitation, expenses incurred in the conduct of the Company's business while
away from his domicile and expenses for travel, meals, lodging, entertainment
and related expenses that are for the benefit of the Company.
7. Other Benefits.
(a) During the Term, Executive shall be entitled to
participate in all profit-sharing, insurance, medical and retirement benefit
plans, together with vacation and other employee benefits of the Company, now in
effect or as hereafter amended or established, in which Company executive
employees are permitted to participate. The Executive's participation shall be
in accordance with the terms and provisions of such plans.
(b) During the Term, the Company shall furnish Executive
with a suitable office, necessary administrative support and customary furniture
and furnishings for such office. The Company further agrees that Executive shall
have the use of a Company-owned or Company-leased and maintained automobile, new
every three years, of a kind and model appropriate to his position with the
Company.
8. Termination.
(a) Termination for Cause. This Executive's employment under
this Agreement may be terminated by the Company at any time for "cause". In the
event of termination for "cause," Executive (i) shall only be entitled to the
payment of the compensation and benefits contemplated by Section 5, 6, and 7
through the date termination (except for any benefits that the Company may be
required to continue to provide by law) and (ii) and shall not be entitled to
any severance benefits under this Agreement. Unless a Change in Control has
occurred, "cause" shall be as the Board may reasonably determine. Following a
Change in Control, the Company may terminate the Executive's employment for
"cause" only if Executive engages in:
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(i) conduct that constitutes a felony under the laws
of the United States or a state in which Executive works
or resides;
(ii) an act or acts of dishonesty resulting, or
intended to result, directly or indirectly in material
gain to or personal enrichment of Executive at the
Company's expense;
(iii) a deliberate and intentional refusal (except by
reason of incapacity due to illness or accident) to
comply with the provisions of Section 1, provided that
such breach shall have resulted in demonstrably material
injury to the Company, and Executive shall have failed
to remedy such breach within thirty days after notice
received from the Secretary of the Company demanding
that Executive remedy such breach; or
(iv) conduct by Executive that is materially
injurious to the Company, if such conduct was undertaken
without good faith and the reasonable belief that such
conduct was in the best interest of the Company.
(b) Termination Following a Change in Control. After a
Change in Control:
(i) the Company may terminate the Executive's
employment under this Agreement at any time and for any
reason; and
(ii) Executive may terminate his employment at any
time following the occurrence of any of the following
events:
(A) failure to elect or reelect Executive
to, or removal of Executive from, the position
described in Section 1;
(B) Executive's good-faith determination
that there has been a significant change in the
nature or scope of his authorities, powers,
functions, duties or responsibilities attached
to the position described in Section 1 or a
reduction in his compensation as provided in
Section 5 or his benefits as provided in Section
7, which change or reduction is not remedied
within thirty days after notice to the Company
by Executive;
(C) any other breach by the Company of any
provision of this Agreement that is not remedied
within 30 days after notice to the Company by
Executive; or
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(D) the liquidation, dissolution,
consolidation or merger of the Company or
transfer of all or a significant portion of its
assets, unless a successor or successors (by
merger, consolidation or otherwise) to which all
or a significant portion of its assets has been
transferred shall have assumed all duties and
obligations of the Company under this Agreement;
provided that in any event set forth in this
Section 8(b)(ii), Executive shall have elected
to terminate his employment under this Agreement
upon not less than 40 and not more than 90 days'
notice to the Board, attention of the Secretary
of the Company, given within three calendar
months after (1) failure to be so elected or
reelected, or such removal, (2) expiration of
the 30-day cure period with respect to such
event, or (3) the closing date of such
liquidation, dissolution, consolidation, merger
or transfer of assets.
An election by Executive to terminate his employment under the
provisions of this Section 8(b)(ii) shall not be deemed a voluntary termination
of employment by Executive for the purposes of this Agreement or any plan or
practice of the Company.
(c) Payment Upon Termination. In the event that (i) the
Company terminates Executive's employment under this Agreement for any reason
other than Cause or Executive's death or (ii) Executive terminates his
employment under this Agreement pursuant to Section 8(B)(ii), the Company shall
continue to pay to Executive (or in the event of his death following such
termination, his legal representative) his Base Compensation under Section 5, at
the semi-monthly rate in effect immediately prior to the date of such
termination, until December 31, 2002.
(d) Change In Control. For the purposes of this Agreement,
Change in Control shall mean a change in the control of the Company during the
Term, which shall be deemed to have occurred if:
(i) The registration of the Company's voting
securities under the Securities Exchange Act of 1934, as
amended (the "1934 Act"), terminates or the Company
shall have fewer than 300 stockholders of record; or
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(ii) any person or group (within the meaning of
sections 13(d) and 14(d) of the 1934 Act), other than
the Company or any of its majority-controlled
subsidiaries, becomes the beneficial owner (within the
meaning of Rule 13d-3 under the 0000 Xxx) of 30 percent
or more of the combined voting power of the Company's
then outstanding voting securities; or
(iii) a tender offer or exchange offer (other than an
offer by the Company or a majority-controlled
subsidiary), pursuant to which 30 percent or more of the
combined voting power of the Company's then outstanding
voting securities is purchased, expires; or
(iv) the stockholders of the Company approve an
agreement to merge or consolidate with another
corporation (other than a majority-controlled subsidiary
of the Company) unless the stockholders of the Company
immediately before the merger or consolidation are to
own more than 70 percent of the combined voting power of
the resulting entity's voting securities; or
(v) the Company's stockholders approve an agreement
(including, without limitation, a plan of liquidation)
to sell or otherwise dispose of all or substantially all
of the business or assets of the Company; or
(vi) during any period of two consecutive years,
individuals who, at the beginning of such period,
constituted the Board cease for any reason to constitute
at least a majority thereof, unless the election or the
nomination for election by the Company's stockholders of
each new director was approved by a vote of at least
two-thirds of the directors then still in office who
were directors at the beginning of the period; or
(vii) the acquisition of direct or indirect beneficial
ownership of more than 15 percent of the Company's then
outstanding voting securities by any person or group is
approved over the formal objection of the Company by the
Securities and Exchange Commission pursuant to section 9
of the Public Utility Holding Company Act of 1935, as
amended.
However, no Change in Control shall be deemed to have occurred by reason
of any event involving a transaction in which Executive, or a group of persons
or entities with which
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Executive acts in concert, acquires, directly or indirectly, more than 30
percent of the common stock or the business or assets of the Company; any event
involving or arising out of a proceeding under Title 11 of the United States
Code (or the provisions of any future United States bankruptcy law), an
assignment for the benefit of creditors or an insolvency proceeding under state
or local law; or any event constituting approval by the Company's stockholders
of a merger or consolidation if a majority of the group consisting of the
President and Vice Presidents of the Company who are parties to agreements
conferring rights upon a Change in Control shall have agreed in writing prior to
such approval that approval shall be deemed not to constitute a Change in
Control.
9. Mitigation. Executive shall not be required to mitigate the
amount of any payment provided for in this Agreement either by seeking other
employment or otherwise. The amount of any payment provided for herein shall not
be reduced by any remuneration that Executive may earn from employment with
another employer or otherwise following the termination of his employment under
this Agreement.
10. Noncompetition Covenant. For a period of one year following the
termination of Executive's employment under this Agreement or, if Executive has
given a notice pursuant to Section 8(b)(ii), for a period of 15 months following
the giving of such notice, Executive shall assist no individual or entity other
than the Company to acquire any entity with respect to which a proposal to
acquire the entity was presented to the Board prior to the beginning of the
period.
11. Indemnification. The Company shall indemnify Executive to the
fullest extent permitted by applicable Delaware law (as it may be amended from
time to time), including the advance of expenses permitted herein.
12. Performance. The failure of either party to this Agreement to
insist upon strict performance of any provision hereof shall not constitute a
waiver of its rights subsequently to insist upon strict performance of such
provision or any other provision of this Agreement.
13. Non-Assignability. Neither party shall have the right to assign
this Agreement or any rights or obligations hereunder without the consent of the
other party.
14. Invalidity. If any provisions of this Agreement shall be found
to be invalid by any court of competent jurisdiction, such finding shall not
affect the remaining provisions of this Agreement, all of which shall remain in
full force and effect.
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15. Arbitration and Legal Fees. In the event of any dispute
regarding a refusal or failure by the Company to make payments or provide
benefits hereunder for any reason, Executive shall have the right, in addition
to all other rights and remedies provided by law, to arbitration of such dispute
under the rules of the American Arbitration Association, which right shall be
invoked by serving upon the Company a notice to arbitrate, stating the place of
arbitration, within 90 days of receipt of notice in any form (including, without
limitation, failure by the Company to respond to a notice from Executive within
30 days) that the Company is withholding or proposes to withhold payments or
provisions of benefits. In the event of any such dispute, whether or not
Executive exercises his right to arbitration, if it shall ultimately be
determined that the Company's refusal or failure to make payments or provide
benefits hereunder was wrongful or otherwise inconsistent with the terms of this
Agreement, the Company shall indemnify and hold harmless Executive from and
against any and all expenses incurred in connection with such determination,
including legal and other fees and expenses.
16. Successors. This Agreement shall be binding upon and inure to
the benefit of Executive (and his personal representative), the Company and any
successor organization or organizations that shall succeed to substantially all
of the business and property of the Company, whether by means of merger,
consolidation, acquisition of substantially all of the assets of the Company or
otherwise, including by operation of law.
17. Set-off. The Company shall have no right of set-off or
counterclaim in respect of any claim, debt or obligation against any payments or
benefits provided for in this Agreement.
18. Amendments. No amendment to this Agreement shall be effective
unless in writing and signed by both the Company and Executive.
19. Governing Law. This Agreement shall be interpreted and enforced
in accordance with the laws of the State of Delaware.
20. Notices. Unless otherwise stated herein, all notices hereunder
shall be in writing and shall be deemed to be given when personally delivered or
mailed by United States registered or certified mail, postage prepaid, to, if to
the Company, 000 Xxxxxx Xxxx Xxxxxxxxx, Xxxxx, Xxxxxxxx 00000, and, if to
Executive, the last address therefor shown on the records of the Company. Either
the Company or Executive may, by notice to the other, designate an address other
than the foregoing for the receipt of subsequent notices.
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21. Withholding. The Company may withhold from any amounts payable
to Executive hereunder all federal, state, city or other taxes that the Company
may reasonably determine are required to be withheld pursuant to any applicable
law or regulation.
22. Nature of Payments Upon Termination. All payments to Executive
pursuant to Section 8 be considered as liquidated damages or as severance
payments in consideration of Executive's past services to the Company, and no
such payment shall be regarded as a penalty to the Company.
23. Acknowledgment. The parties hereto each acknowledge that each
has read this Agreement and understands the same and that each enters into this
Agreement freely and voluntarily.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
CHESAPEAKE UTILITIES CORPORATION
[CORPORATE SEAL] By:
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Name:
Title:
ATTEST:
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Secretary
EXECUTIVE
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Xxxxx X. Xxxxxx
