EMPLOYMENT AGREEMENT
AGREEMENT dated as of December 1, 1998, between
ENERGYNORTH, INC., a New Hampshire corporation (the "Company") and
XXXXXXXX X. XXXXXXXX, residing in Bedford, New Hampshire (the
"Executive').
WHEREAS, the Executive has been employed by the Company
or its subsidiaries 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
her upon the terms and conditions herein provided.
2. Position and Responsibilities.
The Company shall employ the Executive and the Executive
agrees to serve, as Executive Vice President Officer, or any other
office to which she is elected, for the term and on the conditions
hereinafter set forth. The Executive agrees to perform such
services not inconsistent with her position as shall be assigned to
her 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 twenty-four (24) 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 twenty-four (24) months from the effective date of
this Agreement or twenty-four (24) months from December 1st of the
year in which this Agreement was last extended.
(c) Duties. During such period of her employment
hereunder, except for illness, vacation periods, and reasonable
leaves of absence, the Executive shall devote substantially all of
her business time, attention, skill and efforts to the faithful
performance of her 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 her 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 her services in such capacities at the aggregate
base salary rate of one hundred seventy-five thousand dollars
($175,000) 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 her Deferred Compensation
Account, maintained in accordance with the Deferred Compensation
Agreement between the Executive and the Company, as amended or
replaced, such 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 she 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, as amended or
replaced. The Executive,
may, in addition, be compensated by the Company crediting amounts
to her 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, or an automobile allowance, for her
exclusive use on the same basis as other officers and in any event
on a basis no less favorable than that enjoyed by her 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 her
for or on behalf of the Company (or its subsidiaries or affiliates)
in the performance of her 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
administrative 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
administrative policies and at the time the Executive elects to
retire under the provisions of the Pension Plan if within two 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, 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 semi-
monthly to the Executive, or if she is not living, to her estate or
to her 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 her termination of
employment. Such payments shall commence on the last day of the
month following the date of her 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 her damages
by attempting to secure comparable employment, and if she 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 she
was paid prior to the determination of her 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 her 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 to 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 her 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 herself or as a
fiduciary, not more than 1% of the equity 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 she 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.
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:
Xxxxxxxx X. Xxxxxxxx
0 Xxxxxxx Xxxx
Xxxxxxx, XX 00000
If to the Company:
Xxxxxx X. Xxxxxxxx
President and CEO
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 her beneficiary under
this Agreement Xxxxx X. Xxxxxxx, provided that the Executive may
change her 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: /S/ XXXXXX X. XXXXXXXX
XXXXXX X. XXXXXXXX
President & CEO
/S/ XXXXXXXX X. XXXXXXXX
XXXXXXXX X. XXXXXXXX
