Exhibit 10(s)
THE BERKSHIRE GAS COMPANY
SEVERANCE AGREEMENT
THIS SEVERANCE AGREEMENT, dated this 9th day of June, 1999 (the
"Agreement"), by and between THE BERKSHIRE GAS COMPANY, a Massachusetts
Corporation (herein referred to as the "Company"), AND XXXXXX X. XXXXXXXX
having an address at 000 XXXXXXX XXXXX, XXXXXX, XX 00000 (the
"Employee").
W I T N E S S E T H T H A T:
WHEREAS, the Employee is an Employee of the Company and an integral
part of its management who participates in the decision-making process
relating to short-and-long-term planning and policy for the Company;
WHEREAS, the Company is a wholly owned subsidiary of Berkshire Energy
Resources, a Massachusetts Business Trust (hereinafter referred to as the
"Parent"); and
WHEREAS, the Board of Trustees of Parent (the "Board"), at its meeting
on June 9, 1999, determined that it would be in the best interests of the
Company, its shareholder and the Employee to ensure continuity in the
management of the Company's administration and operations in the event of a
Change of Control (as defined in Section 3) by entering into a Severance
Agreement to retain the services of the Employee.
NOW THEREFORE, it is hereby agreed by and between the parties hereto
as follows:
1. Nature of Agreement. In order to induce the Employee to remain
in the employ of the Company and to provide continued services
to the Company now and in the event that a Change of Control is
imminent or occurring, this Agreement sets forth severance
benefits that the Company shall pay the Employee, after the
occurrence of a Change in Control, in the event of the
Employee's termination of his or her employment for Good Reason
(as defined in Section 4) or for any reason other than Cause
(as defined in Section 4), disability, death or retirement.
2. Terms:
(1) Term of Agreement. The initial term of this Agreement
shall commence immediately upon the date hereof and
continue in full force for a period of thirty-six (36)
calendar months.
(2) Extensions. This Agreement shall be subject to review
annually by the Board prior to June 30th each year. As
part of such annual review, the Board shall consider
whether to extend the term of this Agreement for an
additional year. Unless the Board affirmatively votes at
such review not to extend the term of this Agreement, the
term of this Agreement shall be extended automatically for
a period of twelve months from the previously effective
termination date. In the event that the Board votes not
to extend the terms of this Agreement, the termination
date of this Agreement shall be the later of thirty-six
(36) months from the effective date of this Agreement or
thirty-six (36) months from the June 30th of the year in
which this Agreement was most recently extended; provided,
however, that this Agreement shall expire automatically
and with no requirement of notice or action by either
party, on the third anniversary of a Change of Control,
unless earlier terminated as provided in this Agreement.
The Company shall give the Employee prompt notice of any
such vote to terminate this Agreement.
3. Change in Control. The term, "Change in Control", shall mean
the occurrence of any of the following:
(1) The Company or Parent receives a report on Schedule 13D
filed with the Securities and Exchange Commission pursuant
to Section 13(d) of the Securities Exchange Act of 1934,
as amended (hereinafter referred to as the "Exchange
Act"), disclosing that any person, group, corporation or
other entity is the beneficial owner, directly or
indirectly, of twenty-five percent (25%) or more of the
outstanding shares of the Company or Parent;
(2) Any Person (as such term is defined in Section 13(d) of
the Exchange Act), group, corporation or other entity
other than the Company or Parent or a wholly-owned
subsidiary of the Company or Parent, purchases shares
pursuant to a tender offer or exchange offer to acquire
any shares of the Company or Parent (or securities
convertible into shares) for cash, securities or any other
consideration, provided that after consummation of the
offer, the Person, group, corporation or other entity in
question is the beneficial owner (as such term is defined
in Rule 13d-3 under the Exchange Act), directly or
indirectly, of twenty-five percent (25%) or more of the
outstanding shares of the Company or Parent (calculated as
provided in Paragraph (d) of the Rule 13d-3 under the
Exchange Act in the case of rights to acquire shares); or
(3) The shareholders of the Company or Parent approve (i) any
consolidation or merger of the Company or Parent in which
the Company or Parent is not the continuing or surviving
corporation or pursuant to which shares of the Company or
Parent would be converted into cash, securities or other
property, (ii) any acquisition, combination or merger of
the Company or Parent by or with another corporation in
which, immediately after such acquisition, combination or
merger, less than a majority of the outstanding voting
shares (or less than a majority of any combination of such
voting shares, warrants, options, convertible securities
or the like as may represent control) of the parent or
surviving corporation are owned by the owners of the
voting shares of the Company or Parent outstanding
immediately prior to such acquisition, combination or
merger, (iii) a complete liquidation or dissolution of the
Company or Parent, or (iv) any sale, lease, exchange or
other transfer (in one transaction or a series of related
transactions) of all or substantially all the assets of
the Company or Parent.
4. Severance Benefit:
(1) Amount. If, within twenty-four (24) months after a Change
of Control of the Company, the Employee is discharged
without Cause or resigns for Good Reason (as defined
below), the Company shall pay to the Employee, on a
monthly basis, a severance benefit in an amount equal to
one thirtieth (1/30th) of 250% of the Employee's then
current annual salary plus prior year's cash bonus,
continuing for a period of thirty (30) months. Severance
benefits payable hereunder shall not be considered in the
computation of pension benefits payable under the
Company's pension plan or benefits payable under the
Supplemental Executive Retirement Plan. All stock options
held by Employee as of the date of a Change of Control
shall become immediately exercisable.
(2) Good Reason. If any one or more of the following events
occur within twenty-four (24) months after a Change of
Control, the Employee may voluntarily terminate his or her
employment within thirty (30) days of the occurrence of
such event and be entitled to the severance benefits set
forth in Sections 4 and 5 of this Agreement:
(1) Employee in his or her sole discretion elects to
terminate their employment with the Company for any
reason whatsoever within ninety (90) days of a Change
of Control.
(2) the Company assigns any duties to the Employee that
are substantially different from the Employee's
position, duties, offices, titles, responsibilities,
reporting requirements or status with the Company
immediately prior to the Change of Control;
(3) the Company reduces the Employee's base salary,
including deferrals, as in effect immediately prior
to the Change of Control;
(4) the Company discontinues any bonus or other
compensation plans or any other benefit, stock
ownership plan, stock purchase plan, stock option
plan, life insurance plan, health plan, disability
plan or similar plan (as the same existed immediately
prior to the Change of Control) in which the Employee
participated or was eligible to participate
immediately prior to the Change of Control and in
lieu thereof does not make available plans providing
at least comparable benefits, or fails to provide the
Employee with the number of paid vacations days to
which the Employee was entitled in accordance with
normal vacation policy immediately prior to the
Change of Control;
(5) the Company takes action which adversely affects the
Employee's participation in, or eligibility for, or
materially reduces the Employee's benefits under, any
of the plans described in subsection (iv) above, or
which deprives the Employee of any material fringe
benefit enjoyed by the Employee immediately prior to
the Change of Control;
(6) the Company requires the Employee to be based at any
office or location other than one within a fifty (50)
mile radius of the Company's headquarters in
Pittsfield, Massachusetts;
(7) the Company purports to terminate the Employee
otherwise than for Cause (as defined below); or
(8) the Company fails to comply with and satisfy the
terms of Section 12 hereof, provided that such
successor has received at least ten (10) days' prior
written notice from the Company or from the Employee
of the terms of Section 12.
(3) Cause. Cause shall mean: dishonesty, misfeasance which
substantially interferes with the orderly business of the
Company or any of its affiliates, action that directly or
indirectly causes the Company or its affiliates to suffer
substantial loss or damage, refusal to follow or material
neglect of reasonable requests of the Company made
pursuant to this Agreement, conduct that substantially
interferes with or damages the standing or reputation of
the Company or any of its affiliates, conviction of a
felony or crime involving an act of moral turpitude, or
any reason constituting "Cause" or "Good Cause" for the
Employee's termination by the Company set forth in the
Employee's employment agreement, if any, with the Company.
(4) Notice of Termination. Any termination of the Employee's
employment by the Company for Cause, or by the Employee
for Good Reason, shall be communicated by Notice of
Termination to the other party hereto given in accordance
with Section 17 hereof. For purposes of this Agreement, a
"Notice of Termination" means a written notice which (i)
indicates the specific termination provision in the
Agreement relied upon, (ii) to the extent applicable, sets
forth in reasonable detail the fact and circumstances
claimed to provide a basis for termination of 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 of Termination, specifies the
termination date (which date shall be not more than thirty
(30) days after the date the Notice of Termination is
received).
(5) Date of Termination. "Date of Termination" means (i) if
the Employee's employment is terminated by the Company for
Cause, or by the Employee for Good Reason, the date of
receipt of the Notice of Termination or any later date
specified therein (but not more than thirty (30) days
after the date of the Notice of Termination is received),
as the case may be, (ii) if the Employee is terminated by
the Company other than for Cause, retirement or
disability, the date on which the Company notifies the
Employee of such termination, and (iii) if the Employee is
terminated by reason of death, retirement or disability,
the date of the Employee's death or retirement, or the
date the Employee is determined to have a disability, as
the case may be.
(6) Retirement, Disability or Death. If the Employee's
employment is terminated due to retirement or disability,
or in the event of the Employee's death while still
employed, no severance benefits under this Agreement shall
be paid, regardless of any occurrence of a Change of
Control. If, in the judgment of the Board, the Employee
shall become physically or mentally incapacitated and as a
result thereof shall become unable to continue the proper
performance of the Employee's duties (reasonable absences
because of such incapacity for up to one hundred and
eighty (180) consecutive days excepted), or if the
Employee retires or is deceased while employed by the
Company, this Agreement shall thereupon cease and
terminate.
(7) Excise Tax Restoration Payment. In the event that it is
determined that any payment or distribution of any type to
or for the benefit of the Employee made by the Company, by
any of its affiliates, by any person who acquires
ownership or effective control or ownership of a
substantial portion of the Company's assets (within the
meaning of Section 280G of the Internal Revenue Code of
1986, as amended, and the regulations thereunder (the
"Code")) or by any affiliate of such person, whether paid
or payable or distributed or distributable pursuant to the
terms of a severance agreement or otherwise (the "Total
Payments"), would be subject to the excise tax (such
excise tax, together with any such interest or penalties,
are collectively referred to as the "Excise Tax"), then
the Employee shall be entitled to receive an additional
payment (an "Excise Tax Restoration Payment") in an amount
that shall fund the payment by the Employee of any Excise
Tax on the Total Payments as well as all income taxes
imposed on the Excise Tax Restoration Payment, any Excise
Tax imposed on the Excise Tax Restoration or any Excise
Tax. Employee shall also be entitled to reimbursement for
the cost of tax preparation, consultation and
representation required in connection with the application
of any such Excise Tax.
(8) Executive Retiree health Plan. Notwithstanding any
provision of this Agreement, Employee and Employee's
spouse shall retain eligibility under that certain
Executive Retiree Health Plan, dated August 25, 1998, in
the event Employee's employment with the Company is
terminated, voluntarily or involuntarily, subsequent to a
Change of Control, provided that the date of any such
termination is within thirty (30) months of Employee's
early retirement date as defined under the Company's
defined benefit pension plan.
5. Additional Benefits. Nothing in the Agreement shall affect the
Employee's eligibility to participate in all group health,
dental, hospitalization, life, travel or accident or other
insurance plans or programs and all other perquisites
(including the use of a Company-owned car where applicable),
fringe benefit or retirement plans or additional compensation,
which the Company or any subsidiary of the Company may
hereafter, in its or their sole and absolute discretion, elect
to make available to the senior management employees of the
Company generally, and the Employee 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 provision thereof. Specifically, the Employee shall:
(1) enjoy the rights granted under any employment contract
between the Employee and the Company (except as limited
below);
(2) participate in The Berkshire Gas Company Retirement Plan
and any related excess benefit or supplemental retirement
program (hereinafter referred to collectively as the
"Retirement Program");
(3) participate in any savings or thrift plan maintained by
the Company;
(4) participate in any stock option, stock appreciation right,
equity incentive or deferred compensation plan maintained
by the Company;
(5) participate in the Company's death benefit plans;
(6) participate in the Company's disability benefit plans;
(7) participate in the Company's medical, dental and health
and welfare plans;
(8) participate in equivalent successor plans of the Company
for which senior management employees are eligible; and
(9) to be provided with such employee perquisites as may be
provided under Company policy to employees with a
comparable level of responsibility; provided, however,
that nothing in this Agreement shall preclude the Company
from amending or terminating any such plan or program, on
the condition that such amendment or termination is
applicable to all of the Company's senior management
employees generally. For purposes of the foregoing, any
plan or program maintained by any subsidiary of the
Company which is made available to the senior management
of the Company and its affiliates taken as a whole, shall
be deemed to be a plan or program maintained by the
Company.
In addition, if at the time the Employee becomes entitled to a
severance benefit under Section 4 the Company is providing the
Employee with a leased automobile, the Employee may (at the
Employee's option) elect to have such lease assigned to the Employee
so that the Employee will assume all rights and obligations with
regard to the lease of such automobile.
Notwithstanding the foregoing or any other provision of this
Agreement, the Company and the Employee intend that the severance
benefit payable by the Company pursuant to this Agreement shall be in
lieu of any termination pay (whether contractual, statutory or by way
of legal damages for breach of contract) that may now or hereafter be
provided for the Employee of for or to which the Employee may be or
become eligible or entitled under any employment contract, consulting
agreement or similar compensatory arrangement with the Company.
6. Source and Nature of Payments. All payments provided for in
Sections 4 and 5 hereof shall be paid in cash from the general
funds of the Company or any of its affiliates. The Company
shall not be required to establish a special or separate fund
or other segregation of assets to ensure such payments. All
payments provided pursuant to Section 4 hereof shall be deemed
severance pay in consideration of the Employee's past service,
and pay in consideration of the Employee's continued service
from the date of this Agreement.
7. Litigation Expenses. In the event of any litigation or other
proceeding between the Company and the Employee with respect to
the subject matter of this Agreement and the enforcement of
rights thereunder, the Company shall reimburse the Employee for
all reasonable costs and expenses relating to such litigation
or other proceeding as they are incurred, including reasonable
attorneys' fees and expenses, regardless of whether such
litigation results in any settlement or judgment or order in
favor of any party; provided, however, that any claim or action
initiated by the Employee relating to this Agreement shall have
been made or brought after reasonable inquiry and shall be
well-grounded in fact, and warranted by existing law or a good
faith argument for the extension, modification or reversal of
existing law, and that is not interposed for any improper
purpose; such as to harass or to cause unnecessary delay or
needless increase in the cost of litigation.
In no event shall the Employee 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 Section 7 shall survive the termination for any
reason of this Agreement (whether such termination is by the
Company, by the Employee, upon the expiration of this Agreement
or otherwise).
8. Late or Refused Payment. If the Company refuses or fails to
timely pay or provide the severance benefits specified in
Sections 4 and 5 upon demand as provided in this Agreement and
if such refusal or failure is not corrected within 10 business
days after the Employee provides written notice to the Company
concerning the refusal or failure, then the Company shall pay
immediately to the Employee an additional amount equal to 50%
of the severance benefit to which Employee is entitled under
Sections 4 and 5 of this Agreement.
9. Taxes. 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.
10. Payment Deductibility. The Company shall be obligated to pay
to the Employee pursuant to Sections 4 and 5 hereof even if the
Company is not entitled to deduct such severance benefit as a
result of the operation of Section 280G of the Internal Revenue
code of 1954 (or any successor section thereof), as amended.
11. 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 Employee.
12. 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 the
Company would be required to perform. 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.
13. Mitigation and Set-Off. The Employee shall have no duty to
mitigate damages under the terms of this Agreement. Moreover,
the amount of any compensation (including base compensation and
incentive or bonus compensation) received by Employee following
the termination of the Employee's employment with the Company,
whether from a subsequent full-time or part-time employer or
from self-employment, shall not reduce the amount of the
severance benefit that the Employee is entitled to receive
under Sections 4 and 5 hereof. The Employee is under no duty
to notify the Company of compensation received or to be
received from such other employment.
14. Entire Understanding. This Agreement contains the entire
understanding between the Company and the Employee with respect
to the subject matter hereof and supersedes any prior
employment agreement between the Company and the Employee.
15. Severability. If, for any reason, any one or 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 provisions 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 the law continue in full force and
effect.
16. Consolidation, Merger or Sale of Assets. 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 with a net worth at least
equal to that of the Company and 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 "the Company", as used herein shall mean
such other corporation and this Agreement shall continue in
full force and effect.
17. Notices. All notices, requests, demands 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:
(1) To the Company:
The Berkshire Gas Company
000 Xxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxxxxxxx 00000
(2) To the Employee:
at the address set forth
at the beginning of this Agreement
or to such other address as either party shall have previously
specified in writing to the other.
18. No Attachment. Except as required by law, no right to receive
payments under this Agreement shall be subject to anticipation,
commutation, alienation, sale, assignment, encumbrance, charge,
pledge or hypothecation or to execution, attachment, levy or
similar process or assignment by operation of law, and any
attempt, voluntary or involuntary, to effect any such action
shall be null, void and of no effect.
19. Binding Agreement. This Agreement shall be binding upon and
shall inure to the benefit of the Employee and the Company and
their respective permitted successors and assigns.
20. Modification and Waiver. This Agreement 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 waiver and shall not constitute a waiver of such
term or condition for the future or as to any act other than
that specifically waived.
21. 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.
22. Governing Law. This Agreement and its validity,
interpretation, performance and enforcement shall be governed
by the laws of the Commonwealth of Massachusetts, without
giving effect to the choice of law provisions in effect in the
Commonwealth.
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed by its officer thereunto duly authorized, and the Employee has
signed this Agreement, all as of the date first above written.
COMPANY:
THE BERKSHIRE GAS COMPANY
By: /s/ Xxxxx X. Xxxxxxxx
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its President
EMPLOYEE:
/s/ Xxxxxx X. Xxxxxxxx
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