CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT ("Agreement") is made by
EnergyNorth, Inc., with a business address at 0000 Xxx
Xxxxxx, Xxxxxxxxxx, Xxx Xxxxxxxxx (the "Company"), Eastern
Enterprises ("Eastern") and XXXXXX X. XXXXXXXX (the
"Consultant"); and is contingent upon the closing of the
merger involving the Company contemplated by the Agreement
and Plan of Reorganization dated as of July 14, 1999 by
and between the Company, Eastern and a merger subsidiary
(the "Transaction"), is effective upon the date of
Consultant's termination from employment with Company upon
or following the Transaction, and is for the purpose of
setting forth the exclusive terms and conditions by which
Company desires to acquire Consultant's services.
In consideration of the mutual obligations specified
in this Agreement, and any compensation paid to Consultant
for his services, the parties agree to the following:
I. TITLE AND SCOPE OF WORK.
(a) The Company hereby agrees that upon the
effective date of this Agreement it will retain
Consultant, and Consultant hereby agrees that in
accordance herewith he will perform at the request of the
Company, certain consulting services which are consistent
with consulting services typically provided by a senior
executive advisor, including but not limited to serving as
Chairman of the New Hampshire Advisory Board of
EnergyNorth Natural Gas, Inc., providing advisory services
to Eastern and its direct and indirect subsidiaries (such
direct and indirect subsidiaries as from time to time
existing during the Term, the "Subsidiaries"),
representing ENI and Eastern within New Hampshire with
local and regional civic, charitable and educational
organizations in the same manner as immediately prior to
the effective date of this Agreement, assisting in the
integration of operations after the Transaction, assisting
in any regulatory, environmental, legislative or legal
proceedings with the State of New Hampshire involving
Eastern and any of its Subsidiaries and assisting in
identifying new business opportunities for Eastern and its
Subsidiaries (the "Services"). Consultant shall hold the
title of Senior Executive Advisor and shall report to the
Chief Operating Officer of Eastern.
(b) During the first twelve (12) months of the Term
of this Agreement (the "first year of the Term"),
Consultant shall provide the Company with up to seventy-
five (75) full business days of Services. During the
twelve (12)-month period beginning on the first
anniversary of the effective date of this Agreement (the
"second year of the Term"),
Consultant shall provide the Company with up to twenty-five
(25) full business days of Services. During the twelve
(12)-month period beginning on the second anniversary of the
effective date of this Agreement (the "third year of the Term"),
Consultant shall be available to provide to the Company up to
an additional twenty-five (25) full business days of Services.
The parties acknowledge that the Company's need for Consultant's
Services under this Agreement may vary from period to period
and is likely to be greater in the period shortly following
the Transaction, and Consultant agrees that he will provide
the Services described in this paragraph only as requested
by the Company and on such dates and at such times as the
Company may reasonably specify.
(c) If so requested by the Company during the Term,
Consultant may, but shall not be required to, provide the
Company with additional Services.
(d) For purposes of this Agreement, any business day
on which Consultant performs Services at the Company's
request shall count as a full business day of Services
unless the time spent by Consultant providing such
Services on such day amounts to a half day or less, in
which event such day shall count as one-half of a full
business day of Services. Time spent commuting by
Consultant shall not be counted as Services for purposes
of this Agreement, but time spent in other travel at the
request of the Company shall be counted.
II. TERM.
The Term of this Agreement shall commence upon the
effective date of this Agreement and shall continue
through the earlier of: (a) the day preceding the third
anniversary of such effective date, and (b) the effective
date of termination of this Agreement pursuant to Section
V(a) hereunder.
III. COMPENSATION HEREUNDER.
During the Term of this Agreement:
(a) Consultant shall, at the end of each month
during the Term, account to the Company in form
satisfactory to the Company for the Services he has
performed during the month. In exchange for the
performance of Services rendered to the Company under
Section I(b) and Section I(c) hereof during the first and
second years of the Term, the Company shall pay Consultant
an aggregate of $200,000 in substantially equal monthly
installments ($8,333.33 except for the last month, for
which the installment payment shall be $8,333.41) payable
in arrears. At such time, if any, as the aggregate number
of full business days of Services performed by Consultant
for the Company during those
years exceeds one hundred (100) full business days
(each such excess day, an "additional day"), Consultant
shall be entitled to an additional payment of $2,000
for each additional day, such payment to be made within
seven (7) days after receipt by the Company of a proper
monthly accounting for such additional day or days.
Consultant shall likewise be entitled to a payment of
$2,000 for each full business day of Services, if any,
performed during the third year of the Term, such payment
to be made within seven (7) days after receipt by the
Company of a proper monthly accounting for such Services.
(b) In addition to amounts payable under paragraph
(a) above, the Company shall pay to Consultant or his
estate $29,000 at the beginning of each of the first,
second and third years of the Term. The Company's
obligation to make the payments described in this
subparagraph shall survive the termination of this
Agreement pursuant to Section V(a); provided, that if the
Consultant breaches Section VI neither he nor his estate
shall be entitled to any payments under this paragraph.
(c) The Company shall reimburse Consultant for all
necessary and reasonable travel and business expenses (but
not for expenses associated with commuting within New
Hampshire to or from home, or commuting from a vacation
site, unless such expenses are approved in advance by the
Company) incurred by Consultant in performing Company-
requested services under this Agreement.
(d) Except as otherwise required by law, the Company
shall not withhold any sums from payments made to
Consultant for social security or other federal, state or
local tax liabilities or contributions, and all such
withholdings, liabilities and contributions shall be
solely Consultant's responsibility, it being understood
and acknowledged that Consultant shall perform the
Services as an independent contractor and not as an
employee and that he shall not be eligible for, nor shall
he participate in, any employee benefit program of Eastern
or its Subsidiaries in respect of his Services under this
Agreement. Notwithstanding any provision to the contrary
in any other agreement or understanding, the Company shall
not be obligated to gross up Consultant for any taxes
incurred with respect to payments or benefits hereunder.
IV. MAINTENANCE OF OFFICE AND SUPPORT SERVICES.
During the Term of this Agreement, the Company shall
provide Consultant with appropriate office space, parking,
reasonable secretarial support services, and computer
access at its principal administrative offices in New
Hampshire. To the extent consistent with the requirements
communicated to him by the Company in connection with a
request for particular Services, and if approved in
advance by the Company, Consultant may perform specific
Services from his home or another location (such as a
vacation site).
V. TERMINATION OF CONSULTING SERVICES.
(a) Discharge for Cause, Death or Disability.
Notwithstanding any of the foregoing provisions of this
Agreement, the Company may, subject to this Section V(a),
discharge Consultant for Cause, due to the death of
Consultant or due to Consultant's Disability. For
purposes of this Section V, "Cause" shall mean: (i)
conviction of a felony or crime involving an act of moral
turpitude, dishonesty or misfeasance, in each case that
substantially interferes with the orderly business of the
Company or any of its subsidiaries, (ii) the failure or
refusal of Consultant to follow or material neglect by
Consultant of reasonable requests of the Company made
pursuant to this Agreement, and (iii) violating Section VI
or otherwise willfully engaging in conduct that
substantially interferes with or damages the standing or
reputation of the Company or any of its subsidiaries;
provided, however, no termination for Cause pursuant to
either clause (ii) or (iii) hereof shall be effective
unless the Company shall have first provided Consultant
(A) 30 days written notice in the manner contemplated by
Section V(d) setting forth in reasonable detail the
Company's basis for such termination, including the manner
in which the Company believes Consultant has not
substantially performed his duties, and (B) 30 days during
which Consultant has an opportunity to cure any
deficiencies noted by the Company in such notice. In the
event of the discharge of Consultant for Cause or death or
Disability of Consultant, this Agreement and all of the
rights and obligations of the parties hereto shall
terminate, except where this Agreement expressly provides
that any provisions survive termination of this Agreement.
For purposes of this Section V(a), no act or failure to
act by Consultant shall be considered "willful" unless it
is done, or admitted to be done, in bad faith and without
a reasonable belief that Consultant's action or omission
was in the best interests of the Company.
(b) "Disability," for purposes of this Section V(a),
shall be defined as the inability of Consultant to perform
the essential functions of the position with or without
reasonable accommodation due to physical or mental illness
or injury.
(c) Consequences of discharge. If the Company
discharges Consultant for Cause, death or Disability, the
Company shall have no further obligation to make payments
under Section III(a) except as provided in the immediately
following sentence. If as of the date of such a discharge
the aggregate payments previously made to Consultant under
Section III(a) do not at least equal the number obtained
by multiplying $2,000 times the number of full business
days of Services performed by Consultant, the Company
shall pay to Consultant, within seven (7) days after
receipt of a proper final accounting of Consultant's
Services, the excess of (i) the number obtained by
multiplying $2,000 times the number of full business days
of Services reflected in such accounting, over (ii) the
aggregate payments already made by the Company to
Consultant under Section III(a). If the Company
discharges Consultant without Cause, it shall continue to
pay Consultant for the remainder of the Term any amounts
not yet paid under Section III that would have been paid
if he had continued to serve hereunder through the end of
the Term.
(d) Any discharge of Consultant by the Company shall
be communicated by Notice of Termination to the other
party hereto given in accordance with Section XII hereof.
For purposes of this Agreement, a "Notice of Termination"
means a written notice which (i) indicates the specific
provision in this Agreement relied upon, (ii) sets forth
in reasonable detail the facts and circumstances claimed
to provide a basis for discharge of Consultant under the
provision so indicated, and (iii) if the date of discharge
is other than the notice, specifies the termination date
(which date shall be not more than 15 days after the
giving of such notice).
VI. CERTAIN UNDERTAKINGS
(a) In consideration of the Company's undertakings
pursuant to this Agreement, Consultant agrees that during
the first and second years of the Term he will not, within
the states in which Eastern operates its business or in
which any of Eastern's Subsidiaries operates its business,
engage, either as a principal, employee, partner,
consultant or investor (other than through a 1% or smaller
interest in a publicly traded entity) in a business which
competes with any such business of Eastern or its
Subsidiaries.
(b) Consultant further agrees that during the Term
and thereafter he will comply with Eastern's policies and
procedures regarding confidential information, as that term
is hereinafter defined, and will never directly or
indirectly use or disclose, except to his attorney or as
required by judicial or regulatory process or order, any
confidential information as so defined. For purposes of
the preceding sentence, the term "confidential
information" means any and all information (including
without limitation information relating to the development
and implementation of business strategy, financial and
operating forecasts, business policies and practices, and
all other information related to the future conduct of
business (i) that Consultant has acquired in connection
with his previous employment with Eastern and its
Subsidiaries or in connection with his Services hereunder,
(ii) that is not generally known or available to others
with whom Eastern or its Subsidiaries do, or plan to,
compete or do business, and (iii) that pertains to the
business of, or belongs to, Eastern or its Subsidiaries or
a person described in clause (ii).
(c) Consultant agrees that if, at any time, pursuant
to action of any court of competent jurisdiction, the
operation of any part of this Section VI shall be
determined to be unlawful or otherwise unenforceable, then
the coverage of this Section VI shall be deemed to be
restricted as to duration, geographic scope or otherwise,
to the extent, but only to the extent, necessary to make
this paragraph lawful and enforceable in the particular
jurisdiction in which such determination is made.
(d) Consultant acknowledges and agrees that, were he
to breach the provisions of this Section VI, the harm to
Eastern and its Subsidiaries would be irreparable.
Consultant therefore agrees that in the event of such a
breach or threatened breach, Eastern or its Subsidiaries
shall have the right to obtain preliminary and permanent
injunctive relief against any such breach without having
to post bond. Nothing herein shall prohibit Eastern or
its Subsidiaries from seeking damages for a breach by
Consultant of this Section VI.
(e) The provisions of this Section VI and
Consultant's obligations hereunder shall survive the
termination of this Agreement.
VII. SUCCESSOR.
This Agreement shall be binding upon the successor to
the Company in the Transaction. The Company shall require
any other successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise, including
through both stock and asset transactions) 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.
VIII. ENTIRE AGREEMENT.
This Agreement contains the entire understanding of
the Company and Consultant, and supersedes any and all
prior communications, understanding, agreements or
statements between the parties, with respect to the
subject matter hereof.
IX. ARBITRATION.
Any dispute or controversy between the parties
relating to this Agreement shall be settled by binding
arbitration in New Hampshire pursuant to the governing
rules of the American Arbitration Association. Judgment
upon the award may be entered in any court of competent
jurisdiction.
X. 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 or by
Consultant without the other party's prior written
consent.
XI. 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.
XII. 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 Consultant:
----------------
Xxxxxx X. Xxxxxxxx
00 Xxxxxxx Xxxx
Xxxxxxx, XX 00000
If to the Company or to Eastern:
-------------------------------
x/x Xxxxxxx Xxxxxxxxxxx
0 Xxxxxxxxx Xxxx
Xxxxxx, XX 00000
Att: Xxxx X. Xxxxxx
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.
XIII. 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.
XIV. 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.
XV. EASTERN DECLARATION OF TRUST
Reference is hereby made to the declaration of trust
establishing Eastern Enterprises dated July 18, 1929, as
amended, a copy of which is on file in the office of the
Secretary of State of the Commonwealth of Massachusetts.
The name "Eastern Enterprises" refers to the trustees
under said declaration as trustees and not personally, and
no trustee, shareholder, officer or agent of Eastern
Enterprises shall be held to any personal liability in
connection with the affairs of said Eastern Enterprises,
but the trust estate only is liable.
IN WITNESS WHEREOF, the parties hereto have duly
executed this Agreement as of the date first mentioned
above.
Eastern Enterprises EnergyNorth, Inc.
By: ____________________ By:_________________________
____________________________
XXXXXX X. XXXXXXXX
