EMPLOYMENT AGREEMENT
Exhibit 99.1
THIS EMPLOYMENT AGREEMENT (the “Agreement”) is made and entered into as of this 27th day of
October, 2006, to be effective as of the 1st day of August, 2006, by and between
EnergySouth, Inc., an Alabama corporation (the “Company”), and C. S. “Xxxx” Xxxxxxx (the
“Executive”).
WHEREAS, effective August 1, 2006, the Executive became the Company’s President and Chief
Executive Officer and joined the Board of Directors of the Company; and
WHEREAS, the Company and the Executive desire for the Executive’s employment with the Company
to be upon the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants and agreements of the parties set
forth in this Agreement, and other good and valuable consideration, the parties hereto, intending
to be legally bound, agree as follows:
Section 1. Employment; Term; Responsibilities; Standard of Care.
1.1 Employment. The Company employs the Executive and the Executive enters into the
employment of the Company as the Company’s President and Chief Executive Officer upon and subject
to all of the terms and conditions set forth in this Agreement.
1.2 Term. The Company employs the Executive for a term (the “Term”) of three (3)
years, commencing on August 1, 2006 (the “Employment Commencement Date”), and ending on the first
to occur of (a) the date of termination of the Executive’s employment pursuant to Section 3 of this
Agreement, or (b) July 31, 2009. The Company and the Executive may extend the Term by mutual
agreement in writing. In the event that the parties extend the Term, the Executive’s employment
with the Company will continue to be upon and subject to all of the terms and conditions of this
Agreement, except to the extent that the parties modify any provisions of this Agreement in
writing.
1.3. Responsibilities. In the Executive’s capacity as President and Chief Executive
Officer, the Executive will have the duties and responsibilities that the Board of Directors of the
Company reasonably assigns to the Executive from time to time consistent with the typical duties
commensurate with this position. The Executive will be responsible for the general and active
management of the business of the Company under the direction of the Board of Directors, will
preside at all meetings of shareholders, and will implement all orders and resolutions of the Board
of Directors.
1.4. Standard of Care. During the term of the Executive’s employment with the
Company, the Executive will devote his full business time and reasonable best efforts to the
business of the Company. The Executive may not engage in any other business activity, whether or
not such business activity is pursued for profit, without the prior written consent of the Board of
Directors of the Company. The Executive may serve as a director or trustee of any other business
corporation or charitable organization as long as such service does not injure the Company and is
approved by the Chairman of the Board of Directors of the Company. The Executive may hold, as a
passive investor, up to two percent (2%) of the common stock of any public corporation.
Section 2. Compensation, Benefits and Perquisites. As remuneration for
all services to be rendered by the Executive to the Company during the Term of this Agreement, the
Company will pay and provide to the Executive the following compensation, benefits and allowances:
2.1 Employment Bonus. EnergySouth will pay to the Executive an employment bonus in
the amount of $60,000 at such time as the Executive’s family has established residency in Mobile,
Alabama.
2.2 Annual Direct Compensation.
(a) Annual Base Salary. The Company will pay to the Executive an annual base salary
(the “Base Salary”) in an amount established by the Compensation Committee of the Board of
Directors of the Company (the “Compensation Committee”), provided, however, that in no event will
the Base Salary be less than $325,000. The Company will pay the Base Salary to the Executive in
equal installments throughout the year, consistent with the Company’s normal payroll practices.
The Base Salary will be prorated for any year of the Term that is less than a full calendar year.
(b) Annual Incentive Compensation. The Company will provide to the Executive the
opportunity to earn an annual cash incentive award (the “Annual Cash Incentive Award”) under the
Company’s Officer Incentive Compensation Plan. The Annual Cash Incentive Award will range from 0%
to 80% of the Executive’s annual base salary and will be established by the Compensation Committee
based upon reasonable performance goals and measures agreed upon by the Company and the Executive.
The target Annual Cash Incentive Award will be 40% of the Executive’s Base Salary. Any award will
be prorated for any year of the Term that is less than a full calendar year.
2.3 Long-Term Incentive Award. The Company will provide to the Executive the
opportunity to earn a long-term incentive award (the “Long-Term Incentive Award”). The Long-Term
Incentive Award will be established by the Compensation Committee based upon reasonable performance
goals and measures agreed upon by the Company and the Executive. The target Long-Term Incentive
Award will be 90% of the Executive’s Base Salary. The Compensation Committee will determine the
amount of the award, the date or dates for payment of the award, and the medium for granting the
award (by way of example, cash, options, restricted stock, performance stock or common stock). The
initial Long-Term Incentive Award will be made to the Executive in January, 2007.
2.4 Restoration Compensation. In recognition of the Executive’s loss of certain
incentive compensation awards that he incurred by accepting employment with the Company, the
Company will pay the following compensation awards (the “Restoration Compensation”) to the
Executive:
(a) Cash Award. The Company will pay a cash award to the Executive of $750,000 that
will vest in increments of $250,000 on the first, second and third anniversary dates, respectively,
of the Employment Commencement Date. The Company will pay each vested increment of the cash award
to the Executive on the first, second and third anniversary dates, respectively, of the Employment
Commencement Date.
(b) Cash Performance Award. The Company will pay a cash
performance award to the Executive that will range from $0 to $500,000, and will be determined by multiplying
$250,000 by the percentage change in the average value of the Company’s common stock for the five
(5) trading days immediately preceding the Employment Commencement Date and the five (5) trading
days immediately preceding the third anniversary of the Employment Commencement Date. The Company
will pay the cash performance award to the Executive within thirty (30) days following the third
anniversary of the Employment Commencement Date. If, prior to the third anniversary of the
Employment Commencement Date, the outstanding shares of the Company’s common stock are increased,
decreased or exchanged for a different number or kind of shares or other securities by reason of a
stock split, reverse
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stock split, merger, consolidation, sale of all or substantially all of the assets of the Company,
reorganization, or other recapitalization event, the manner of calculating the cash performance
award to the Executive will be equitably adjusted.
2.5 Restoration Pension Plan. The Company and the Executive will enter into a
supplemental deferred compensation agreement (the “Restoration Pension Plan”) in connection with
The Retirement Plan for Employees of EnergySouth, Inc. and Affiliates (the “Pension Plan”). The
Restoration Pension Plan will provide benefits to the Executive that would otherwise have been
payable under the Pension Plan but for the limitations imposed by Section 401(a)(17) and Section
415 of the Internal Revenue Code of 1986, as amended (the “Code”).
2.6 Employee Benefits. The Executive may participate in all retirement and group
benefit plans in which all EnergySouth employees are eligible to participate, pursuant to the terms
of such plans.
2.7 Vacation. The Executive will receive four (4) weeks of paid vacation during each
calendar year of the Term, beginning with the first calendar year of the Term, subject, except as
to length, to the Company’s officer vacation policy as in effect from time to time. During any
year in which the Executive is employed for less than the full calendar year, vacation time will be
prorated accordingly.
2.8 Allowances.
(a) Relocation Expenses. The Company will reimburse the Executive for the following
relocation expenses incurred by the Executive:
(i) Reasonable out-of-pocket expenses paid in connection with moving household furniture from
Houston to Mobile.
(ii) Reasonable real estate commission paid in connection with the sale of the Executive’s
home in Houston.
(iii) Reasonable out-of-pocket closing costs paid in connection with the sale of the
Executive’s home in Houston and the purchase of the Executive’s home in Mobile.
(iv) Interest costs paid in connection with purchasing a residence in Mobile until the earlier
of (A) the six (6) month anniversary of the date of purchase, or (B) the closing date of the sale
of the Executive’s home in Houston.
(v) Reasonable travel costs paid in connection with three (3) visits to Mobile by the
Executive and his spouse for house hunting.
(b) Automobile Allowance. The Company will pay to the Executive a monthly automobile
allowance of $1,000.
Section 3. Termination of Employment.
3.1 General. The Executive’s employment may be terminated in accordance with any of
the provisions set forth in this Section 3. The effective date of termination of the Executive’s
employment under this Section 3 will be referred to as the “Employment Termination Date.” With the
exception of the
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provisions that survive the termination of this Agreement as set forth in Section 6.7, this
Agreement will terminate on the Employment Termination Date.
3.2 Events of Termination.
(a) Termination Due to Death or Disability. The Company may terminate the Executive’s
employment on account of Executive’s disability (as hereinafter described), and the Executive’s
employment will terminate upon the Executive’s death. The Executive will be deemed to suffer from
a disability if, as a result of the Executive’s incapacity due to physical or mental illness, the
Executive is absent from the full-time performance of his duties with the Company for ninety (90)
days, whether or not consecutive, during any six (6) month period.
(b) Voluntary Termination by the Executive. The Executive may terminate his
employment at any time by delivering to the Board of Directors of the Company written notice of the
Executive’s intent to terminate, delivered at least thirty (30) calendar days prior to the
effective date of such termination. The termination will become effective automatically upon the
expiration of the thirty (30) day notice period. Such notice will also constitute the resignation
by the Executive of any positions he may hold as an officer and/or director of the Company and/or
its subsidiaries or affiliates.
(c) Voluntary Termination by the Company. The Company may terminate the Executive’s
employment at any time by delivering to the Executive written notice of the Company’s intent to
terminate, delivered at least thirty (30) calendar days prior to the effective date of such
termination. The termination will become effective automatically upon the expiration of the thirty
(30) day notice period. Unless otherwise stated in the termination notice, such notice will also
constitute termination of the Executive as to any positions that he may hold as an officer and/or
director of the Company and/or its subsidiaries or affiliates.
(d) Termination by the Executive for Good Reason. The Executive may terminate his
employment for Good Reason by delivering to the Board of Directors of the Company written notice of
the Executive’s intent to terminate, delivered at least thirty (30) calendar days prior to the
effective date of such termination, and stating in reasonable detail the facts and circumstances
claimed to provide a basis for such termination. For purposes of this Agreement, “Good Reason”
means, without the Executive’s express written consent, the occurrence of any one or more of the
following:
(i) The assignment to the Executive of any duties inconsistent with his status as President
and Chief Executive Officer of the Company or a substantial reduction in the nature or status of
the Executive’s responsibilities from those set forth in Section 1.3;
(ii) The Company’s requiring the Executive to be based at a location that is more than fifty
(50) miles from the current principal location of the Company without the Executive’s consent;
(iii) The failure by the Company to continue to pay to or provide the Executive with the
compensation, benefits and perquisites set forth in Section 2, at the times provided for payment or
provision thereof; or
(iv) The failure of the Company to obtain a satisfactory agreement from any
successor to assume and agree to perform this Agreement, as contemplated in Section 5.1
hereof.
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Notwithstanding the foregoing, none of the events described in clauses (i) through (iv)
of this Section 3.2(d) will constitute Good Reason unless the Executive has notified the Company in
writing describing the events which constitute Good Reason and the Company has failed to cure such
events within thirty (30) days after the Company’s receipt of such written notice.
(e) Termination by the Company for Cause. The Company may terminate the Executive’s
employment for Cause. For purposes of this Agreement, “Cause” means any one or more of the
following:
(i) The Executive’s conviction, plea of “guilty” or plea of “no contest” to any crime
constituting a felony in the jurisdiction in which it is committed or to any crime involving
dishonesty or willful misconduct that materially injures or is likely to materially injure the
Company;
(ii) Willful violation of any significant Company policy that materially injures the Company
and which violation Executive fails to cure after thirty (30) days written notice to Executive of
such violation;
(iii) Fraud;
(iv) Consistent gross neglect of duties or wanton negligence by the Executive in the
performance of his duties to the Company or any subsidiary or affiliate; or
(v) Willful failure by the Executive to substantially perform or comply with (for reasons
other than disability) the Executive’s obligations under Sections 1.3 and 1.4 or any other duties
reasonably assigned or appropriate to the Executive’s position, which failure is not cured within
thirty (30) days after written notice to Executive of such failure, or the material breach by
Executive of the terms of this Agreement, which material breach is not cured within thirty (30)
days after written notice to Executive of such default.
Notwithstanding the foregoing, the Executive will not be deemed to have been terminated for
Cause unless and until the Company has delivered to the Executive a written notice of termination
which includes a determination by the Board of Directors finding that, in the good faith opinion of
the Board of Directors, the Executive was guilty of conduct constituting “Cause” as set forth in
this paragraph and specifying the particulars thereof in detail. The termination of employment
will be effective upon the giving of such notice in accordance with the provisions of this Section.
3.3 Payments Upon Termination.
(a) Payments Upon Termination Due To Death or Disability.
(i) If, prior to the end of the Term, the Executive’s employment with the Company terminates
due to death or disability, the Company will pay to the Executive or to his legal representative
(A) any accrued but unpaid Base Salary; (B) any Annual Cash Incentive Award that has been awarded
but not paid; (C) any Long-Term Incentive Award that has been awarded but not paid; (D) all unpaid
Restoration Compensation, whether or not vested, with the cash performance award component under
Section 2.4(b) to be determined by substituting the words “the Employment Termination Date” for the
words “the third anniversary of the Employment Commencement Date;” (E) any amounts payable to the
Executive under the terms of the Restoration Pension Plan; and (F) any amounts payable to the
Executive under the terms of the Company’s benefits plans in which the Executive is a participant.
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(ii) Items (A) through (D) of the preceding paragraph will be paid within thirty (30) days
following the Employment Termination Date, or, if later, within thirty (30) days following the date
on which the Executive’s legal representative is qualified and begins serving. Notwithstanding the
preceding sentence of this paragraph, if Section 409A of the Code or the permanent, temporary or
proposed regulations thereunder so require, all amounts payable under Item (D) of the preceding
paragraph will be paid on the first day of the first month following the six (6) month anniversary
of the Employment Termination Date. Amounts payable under Items (E) and (F) of the preceding
paragraph will be paid in accordance with the terms of the respective plans.
(iii) Following the Employment Termination Date, the Executive may exercise any vested but
unexercised stock options in accordance with the terms of the stock option plan or grant agreement
pursuant to which such options were granted. Any stock options that have been granted but have not
vested will be forfeited.
(b) Payments Upon Termination By the Company Without Cause or Termination By the Executive
With Good Reason.
(i) If, prior to the end of the Term, the Company terminates the Executive’s employment
without Cause or if the Executive terminates his employment with the Company for Good Reason, the
Company will pay to the Executive (A) any accrued but unpaid Base Salary; (B) any Annual Cash
Incentive Award that has been awarded but not paid; (C) any Long-Term Incentive Award that has been
awarded but not paid; (D) all unpaid Restoration Compensation, whether or not vested, with the cash
performance award component under Section 2.4(b) to be determined by substituting the words “the
Employment Termination Date” for the words “the third anniversary of the Employment Commencement
Date;” (E) a cash benefit equal to two (2) times the Executive’s Base Salary and two (2) times the
target Annual Cash Incentive Award for the calendar year in which the Employment Termination Date
occurs; (F) any amounts payable to the Executive under the terms of the Restoration Pension Plan;
and (G) any amounts payable to the Executive under the terms of the Company’s benefits plans in
which the Executive is a participant. In addition, the Company will continue the Executive’s
medical and life insurance coverage until the earlier of the two (2) year anniversary of the
Employment Termination Date or the Executive’s re-employment with another employer.
(ii) Items (A) through (D) of the preceding paragraph will be paid within thirty (30) days
following the Employment Termination Date. Item (E) of the preceding paragraph will be paid to the
Executive in equal installments over a period of twenty-four (24) months, commencing on the first
day of the first month following the Employment Termination Date. Notwithstanding the preceding
sentences of this paragraph, if Section 409A of the Code or the permanent, temporary or proposed
regulations thereunder so require, all amounts payable under Item (D) of the preceding paragraph
will be paid on the first day of the first month following the six (6) month anniversary of the
Employment Termination Date, and all installments payable under Item (E) of the preceding paragraph
during the first six (6) months following the Employment Termination Date will be accumulated by
the Company and will be paid on the first day of the first month following the six (6) month
anniversary of the Employment Termination Date, with each remaining installment to be paid on the
first day of the first month thereafter. Amounts payable under Items (F) and (G) of the preceding
paragraph will be paid in accordance with the terms of the respective plans.
(iii) Following the Employment Termination Date, the Executive may exercise any vested but
unexercised stock options in accordance with the terms of the stock option plan or grant agreement
pursuant to which such options were granted. Any stock options that have been granted but have not
vested will be forfeited.
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(c) Payments Upon Termination By the Company Without Cause or Termination By the Executive
With Good Reason Within Two Years of a Change in Control.
(i) If, within two (2) years following a Change in Control, the Company terminates the
Executive’s employment without Cause or if the Executive terminates his employment with the Company
for Good Reason, the Company will pay to the Executive (A) any accrued but unpaid Base Salary; (B)
any Annual Cash Incentive Award that has been awarded but not paid; (C) any Long-Term Incentive
Award that has been awarded but not paid; (D) all unpaid Restoration Compensation, whether or not
vested, with the cash performance award component under Section 2.4(b) to be determined by
substituting the words “the Employment Termination Date” for the words “the third anniversary of
the Employment Commencement Date;” (E) a cash benefit equal to three (3) times the Executive’s Base
Salary and three (3) times the target Annual Cash Incentive Award for the calendar year in which
the Employment Termination Date occurs; (F) any amounts payable to the Executive under the terms of
the Restoration Pension Plan; and (G) any amounts payable to the Executive under the terms of the
Company’s benefits plans in which the Executive is a participant. In addition, the Company will
continue the Executive’s medical and life insurance coverage until the earlier of the three (3)
year anniversary of the Employment Termination Date or the Executive’s re-employment with another
employer.
(ii) Items (A) through (D) of the preceding paragraph will be paid within thirty (30) days
following the Employment Termination Date. Item (E) of the preceding paragraph will be paid to the
Executive within ninety (90) days of the Employment Termination Date. Notwithstanding the
preceding sentences of this paragraph, if Section 409A of the Code or the permanent, temporary or
proposed regulations thereunder so require, all amounts payable under Item (D) of the preceding
paragraph will be paid on the first day of the first month following the six (6) month anniversary
of the Employment Termination Date, and all installments payable under Item (E) of the preceding
paragraph during the first six (6) months following the Employment Termination Date will be
accumulated by the Company and will be paid on the first day of the first month following the six
(6) month anniversary of the Employment Termination Date, with each remaining installment to be
paid on the first day of the first month thereafter. Amounts payable under Items (F) and (G) of the
preceding paragraph will be paid in accordance with the terms of the respective plans.
(iii) Following the Employment Termination Date, any stock options that have been granted but
have not vested will immediately vest, and the Executive may exercise any vested but unexercised
stock options in accordance with the terms of the stock option plan or grant agreement pursuant to
which such options were granted.
(d) Payments Upon Any Other Termination by Either Party.
(i) If, prior to the end of the Term, the Executive’s employment with the Company terminates
for any reason other than those described in Sections 3.3(a), (b) or (c), the Company will pay to
the Executive (A) any accrued but unpaid Base Salary; (B) any Annual Cash Incentive Award that has
been awarded but not paid; (C) any Long-Term Incentive Award that has been awarded but not paid;
(D) any amounts payable to the Executive under the terms of the Restoration Pension Plan; and (E)
any amounts payable to the Executive under the terms of the Company’s benefits plans in which the
Executive is a participant.
(ii) Items (A) through (C) of the preceding paragraph will be paid within thirty (30) days
following the Employment Termination Date. Amounts payable under Items (D) and (E) of the
preceding paragraph will be paid in accordance with the terms of the respective plans.
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(iii) Any incentive awards, deferred compensation or stock options that have not been awarded,
have not vested or which are payable to the Executive on a particular date which occurs following
the Employment Termination Date will be forfeited. Following the Employment Termination Date, the
Executive may exercise any vested but unexercised stock options in accordance with the terms of the
stock option plan or grant agreement pursuant to which such options were granted. Any stock
options that have been granted but have not vested will be forfeited.
(e) Change in Control. For purposes of this Agreement, a “Change of Control” of the
Company will be deemed to have occurred if and when:
(i) Either of the following is consummated: (A) any consolidation or merger of the Company in
which the majority of the Board of Directors are not on the continuing or surviving Board of
Directors or pursuant to which shares of the Company’s common stock are converted into cash,
securities or other property, other than a consolidation or merger of the Company in which each
holder of the Company’s common stock immediately prior to the merger has, upon consummation of the
merger, the same proportionate ownership of common stock of the surviving corporation as such
holder had of the Company’s common stock immediately prior to the merger; or (B) any sale, lease
exchange or other transfer (in one transaction or a series of transactions contemplated or arranged
by any party as a single plan) or all or substantially all of the assets of the Company; or
(ii) The shareholders of the Company approve any plan or proposal for the liquidation or
dissolution of the Company.
3.4 Business Records. Upon termination of his employment, the Executive agrees to
promptly deliver to the Company, all of the Company’s Business Records and all copies thereof and
therefrom and confirms that the Company’s Business Records constitute the exclusive property of the
Company. The term “Business Records” means all customer files, contract files, production records,
maintenance records, reports and related data, memoranda, notes, records, drawings, manuals,
correspondence, financial and accounting information, customer lists, statistical data and
compilations, patents, copyrights, trademarks, trade names, inventions, formulae, methods,
processes, agreements, contracts, manuals or any other documents relating to the business of
the Company and its subsidiaries and affiliates.
Section 4. Confidentiality. In consideration of the Executive’s employment by the
Company as President and Chief Executive Officer and of the confidential information that the
Executive will acquire by virtue of such employment, the Executive agrees to comply with the
confidentiality provisions of this Section.
4.1 Trade Secrets and Confidential Information. During the Term of this Agreement and
thereafter for a period of five (5) years, the Executive will not directly or indirectly divulge or
appropriate to his own use, or to the use of any third party, any “trade secrets” or “confidential
information” (as defined in Section 4.2) of the Company or any of the Company’s subsidiaries and
affiliates (hereinafter, the Company and its subsidiaries and affiliates shall be collectively
referred to as the “Company Group”), except as may be in public domain other than by violation of
the Agreement or as may be required by law.
4.2 Definitions. “Trade Secrets” as used herein means all secret discoveries,
inventions, formulae, designs, methods, processes, techniques of production and know-how relating
to the Company
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Group’s business. “Confidential Information” as used herein means the Company’s internal
policies and procedures, suppliers, customers, financial information and marketing practices, as
well as secret discoveries, inventions, formulae, designs, techniques of production, know-how and
other information relating to the Company Group’s business not rising to the level of a trade
secret under applicable law.
4.3 Injunctive Relief. The parties acknowledge that the breach or threatened breach
of the provisions of Section 4 may result in irreparable injury to the Company and, therefore, that
monetary damages for such breach may be inadequate. In consideration of the foregoing, the
Executive acknowledges and agrees that, in addition to all other remedies available to the Company
at law or in equity, the Company will be entitled to injunctive relief or specific performance, or
both, to restrain any threatened or continued breach of the provisions of Section 4 or to enforce
the terms hereof. The parties hereby waive any requirement for the posting of a bond or other
security in connection with such injunctive relief.
Section 5.
Assignment.
5.1 Assignment by the Company. This Agreement may be assigned or transferred to, and
shall be binding upon and shall inure to the benefit of, any successor of the Company, and any
successor shall be deemed substituted for the “Company” for all purposes under this Agreement. As
used in this Agreement, the term “successor” shall mean any person, firm, corporation, or business
entity which at any time, whether by merger, purchase, or otherwise, acquires all or substantially
all of the assets of the Company.
5.2 Assignment by Executive. This Agreement is personal and non-assignable by the
Executive.
Section 6. Miscellaneous.
6.1 Entire Agreement. This Agreement contains the entire understanding of the parties
with respect to the subject matter hereof, and supersedes all prior or contemporaneous
negotiations, representations, understandings and agreements of, by or among the parties, express
or implied, oral or written (including, without limitation, the terms set forth in that certain
letter agreement from Xxxx X. Hope, Chairman of the Board of Directors of the Company, to the
Executive, which letter agreement is dated June 23, 2006, and was accepted and agreed to by the
Executive on June 26, 2006), all of which are fully merged herein. The express terms of this
Agreement control and supersede any course of performance and/or customary practice inconsistent
with any such terms. Any agreement hereafter made shall be ineffective to change, modify, discharge
or effect an abandonment of this Agreement unless such agreement is in writing and signed by the
parties hereto.
6.2 Severability. If any provisions of this Agreement shall be determined to be
invalid or unenforceable, either in whole or in part, this Agreement shall be deemed amended to
delete or modify, as necessary, the offending provisions and to alter the balance of this Agreement
in order to render the same valid and enforceable to the fullest extent permissible, as aforesaid.
The provisions of this Section shall be construed as an agreement independent of the other
provisions of this Agreement. The existence of any claim or cause of action by the Executive
against the Company shall not constitute a defense to the enforcement by the Company of the
provisions of this Agreement.
6.3 Governing Law and Venue. This Agreement and the rights and obligations of the
parties hereunder shall be governed by and construed and enforced in accordance with the laws of
the
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State of Alabama applicable to agreements made and to be performed wholly within the State of
Alabama. Any suit brought hereon shall be brought in the state or federal courts located in Mobile
County, Alabama.
6.4 Waiver. No waiver by any party to this Agreement of any breach by any other party
of any term, provision, or condition contained in this Agreement, and no failure by any party to
insist upon the performance by any other party of any term, provision or condition contained in
this Agreement, shall be deemed a waiver of such term, provision, or condition, or any subsequent
breach of same, nor shall it be deemed a waiver of any other term, provision, or condition
contained in this Agreement. Neither the failure nor any delay on the part of any party to this
Agreement to exercise any right, remedy, power or privilege under this Agreement shall operate as a
waiver thereof. No single or partial exercise of any right, remedy, power or privilege shall
preclude any other or further exercise of the same or any other right, remedy, power or privilege.
Any party’s consent to or approval of any act shall not be deemed to render unnecessary the
obtaining of such party’s consent or approval of any subsequent act. No waiver shall be effective
unless it is in writing and is signed by the parties asserting such waiver.
6.5 Counterparts. This Agreement and any amendment hereto may be executed in any
number of counterparts, each of which shall be deemed to be an original as to any party whose
signature appears thereon, and all of which shall together constitute one and the same instrument.
This Agreement and any amendment hereto shall be binding when one or more counterparts hereof,
individually or taken together, shall bear the signatures of all of the parties to this Agreement.
6.6 Construction. This Agreement shall be construed and interpreted without regard to
any presumption or other rule requiring construction against the party drafting the document or any
provision contained in the document. It shall be construed neither for nor against any party, but
shall be given reasonable interpretation in accordance with the plain meaning of its terms and the
intent of the parties.
6.7 Survival. The provisions of Sections 3.3, 3.4, and 4 will survive the termination
of this Agreement.
6.8 Captions; Construction. The captions and headings used in this Agreement are
inserted only for convenience and in no way define, describe, extend, or limit the scope of the
particular provisions to which they refer, or the meaning or intent of this Agreement. The words
“herein,” “hereof,” “hereunder,” and other similar compounds of the word “here” as used in this
Agreement shall refer to the entire Agreement and not to any particular provision or section.
6.9 Section 409A Savings Clause. This Agreement and all provisions hereof are
intended to comply with Section 409A of the Code and the permanent, temporary or proposed
regulations issued thereunder. If any provision of this Agreement violates or fails to comply with
the Section 409A of the Code or the permanent, temporary or proposed regulations thereunder, then
such provision shall be modified, as of the effective date of this Agreement, to the least extent
necessary to comply therewith. This Section supersedes all other provisions of this Agreement to
the extent of any inconsistency.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement effective on the day and
year first above written.
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| ENERGYSOUTH, INC. | ||||
| By: | /s/ Xxxx X. Hope, III | |||
| As its Chairman | ||||
| /s/ X. X. Xxxxxxx | ||||
| C.S. “Xxxx” Xxxxxxx | ||||
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