Exhibit 10.39
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") entered into as of August
20, 1997, by and between Northeast Utilities, a Massachusetts business trust
(together with its successors and assigns permitted under the Agreement and
each direct and indirect affiliated company that shall adopt this Agreement
pursuant to Section 18 hereof, the "Company"), with its principal office in
West Springfield, Massachusetts, and its general office in Berlin,
Connecticut, and Xxxxxxx X. Xxxxxx, a resident of Northville, Michigan
("Executive").
WHEREAS, both parties desire to enter into an agreement to reflect
Executive's executive capacities in the Company's business and to provide for
Executive's employment by the Company, upon the terms and conditions set
forth herein:
NOW, THEREFORE, the parties hereto, intending to be legally bound,
hereby agree as follows:
1. Employment. The Company hereby agrees to employ Executive, and
Executive hereby accepts such employment and agrees to perform Executive's
duties and responsibilities, in accordance with the terms, conditions and
provisions hereinafter set forth.
1.1. Employment Term. The term of Executive's employment under this
Agreement shall commence as of the date hereof (the "Effective Date") and
shall continue until August 20, 2002, unless sooner terminated in accordance
with Section 5 or Section 6 hereof, and shall automatically renew for periods
of one year unless one party gives written notice to the other, at least six
months prior to August 20, 2002 or at least six months prior to the end of
any one-year renewal period, that the Agreement shall not be further
extended. The period commencing as of the Effective Date and ending on
August 20, 2002 is hereinafter referred to as the "Initial Employment Term,"
and the period commencing as of the Effective Date and ending on the date on
which the term of Executive's employment under the Agreement shall terminate
is hereinafter referred to as the "Employment Term".
1.2. Duties and Responsibilities. Executive shall serve as Chairman,
President and Chief Executive Officer of Northeast Utilities and in such
other senior positions, if any, to which he may be elected during the
Employment Term. During the Employment Term, Executive shall perform all
duties and accept all responsibilities incident to such positions as may be
assigned to him by the Northeast Utilities' Board of Trustees (the
"Trustees").
1.3. Extent of Service. During the Employment Term, Executive agrees to
use Executive's best efforts to carry out Executive's duties and
responsibilities under Section 1.2 hereof and, consistent with the other
provisions of this Agreement, to devote substantially all Executive's
business time, attention and energy thereto. Except as provided in Section 3
hereof, the foregoing shall not be construed as preventing Executive from
making minority investments in other businesses or enterprises provided that
Executive agrees not to become engaged in any other business activity which,
in the reasonable judgment of the Trustees, is likely to interfere with
Executive's ability to discharge Executive's duties and responsibilities to
the Company.
1.4. Base Salary. For all the services rendered by Executive hereunder,
the Company shall pay Executive a base salary ("Base Salary"), commencing on
the Effective Date, at the annual rate of $750,000, payable in installments
at such times as the Company customarily pays its other senior level
executives (but in any event no less often than monthly). Executive's Base
Salary shall be reviewed annually for appropriate adjustment (but shall not
be reduced below that in effect on the Effective Date without Executive's
written consent) by the Trustees pursuant to its normal performance review
policies for senior level executives.
1.5. Retirement and Benefit Coverages. During the Employment Term,
Executive shall be entitled to participate in all (a) employee pension and
retirement plans and programs ("Retirement Plans") and (b) welfare benefit
plans and programs ("Benefit Coverages"), in each case made available to the
Company's senior level executives as a group or to its employees generally,
as such Retirement Plans or Benefit Coverages may be in effect from time to
time, but not the Company's Supplemental Executive Retirement Plan for
Officers (the "Supplemental Plan"). Executive shall also be covered by an
individual term life insurance policy in the face amount that was maintained
for Executive by his immediately prior employer, CMS Energy, ("CMS") on the
day before the Effective Date. In lieu of coverage under the Supplemental
Plan, Executive shall also be entitled to receive a special retirement
benefit (the "Special Retirement Benefit") equal to the excess of (i) the
annual benefit payable at normal or early retirement, as applicable, under
the benefit formula (including any actuarial subsidy for early retirement) of
the Supplemental Executive Retirement Plan for Employees of CMS
Energy/Consumers Energy Company, as in effect on the Effective Date, as set
forth in Appendix A to this Agreement, and based on all service rendered for
the Company and CMS but on compensation paid only by the Company over (ii)
the retirement benefit actually due to Executive, at his normal or early
retirement date, as applicable, under the Retirement Plan of the Company;
provided, however, that, except as otherwise specifically provided in this
Agreement, Executive must be employed by the Company until at least the fifth
anniversary of the Effective Date in order to be entitled to the Special
Retirement Benefit. In the event a Special Retirement Benefit is payable
under this Agreement, the time of commencement of payment of the Benefit
shall be governed by the terms of the Supplemental Executive Retirement Plan
of Consumers Energy Company, as in effect on the Effective Date. The
standard and optional forms of benefit with respect to the Special Retirement
Benefit shall also be governed by the terms of the Supplemental Executive
Retirement Plan of Consumers Energy Company, as in effect on the Effective
Date. In the event of Executive's death prior to retirement and without
regard to the length of the Employment Term, a survivor benefit (the
"Survivor Benefit") shall be paid as follows: a Survivor Benefit shall be
paid to Executive's surviving spouse, if any, equal to the excess of (i) the
survivor benefit that would be calculated for such spouse under the
Supplemental Plan if (x) Executive's Special Retirement Benefit, as
calculated above, had been a vested Target Benefit under the Supplemental
Plan and (y) Executive's surviving spouse had been entitled to a
pre-retirement death benefit with respect to that Target Benefit under the
Supplemental Plan over (ii) the survivor benefit actually due to such spouse
under the Retirement Plan of the Company.
1.6. Reimbursement of Expenses and Dues; Vacation. Executive shall be
provided with reimbursement of expenses related to Executive's employment by
the Company on a basis no less favorable than that which may be authorized
from time to time for senior level executives as a group, and shall be
entitled to five weeks of vacation annually and holidays in accordance with
the Company's normal personnel policies for senior level executives. In
addition, Executive shall be entitled to (i) the initiation fee for and the
annual dues of a luncheon club in Hartford, Connecticut and (ii) the use of
an automobile including all operating and maintenance expenses until
Executive relocates his residence to Connecticut from Michigan or August 31,
1998, if earlier, both to be used primarily in pursuit of the business of
the Company.
1.7. Short-Term Incentive Compensation. If the Employment Term has not
previously terminated, beginning on January 1, 1998, Executive shall be
entitled to participate in any short-term incentive compensation programs
established by the Company for its senior level executives generally,
depending upon achievement of certain annual individual or business
performance objectives specified and approved by the Trustees (or a Committee
thereof) in its sole discretion; provided, however, that Executive's "target
opportunity" and "maximum opportunity" under any such program shall be at
least 80% and 130% respectively of Executive's Base Salary. Executive's
short-term incentive compensation, either in shares of NU or cash, as
applicable from time to time, shall be paid to Executive, subject to the
Trustees' reasonable discretion, not later than such payments are made to the
Company's senior level executives generally.
1.8. Long-Term Incentive Compensation. If the Employment Term has not
previously terminated, beginning on January 1, 1999, Executive shall also be
entitled to participate in any long-term incentive compensation programs
established by the Company for its senior level executives generally,
depending upon achievement of certain business performance objectives
specified and approved by the Trustees (or a Committee thereof) in its sole
discretion; provided, however, that Executive's "target opportunity" and
"maximum opportunity" under any such program shall be at such percentages of
Base Salary as are determined by the Trustees but at least 60% and 120%
respectively of Base Salary. Executive's long-term incentive compensation,
either in shares of NU, restricted stock units, options or cash, as
applicable from time to time, shall be paid to Executive, subject to the
Trustees' reasonable discretion, not later than such payments are made to the
Company's senior level executives generally.
1.9 Signing Bonus and Stock Option Grant. On or about the Effective
Date, the Company shall pay Executive a bonus of $1,350,000 for agreeing to
become an Executive of the Company and to forego certain compensation and
benefits otherwise to have been provided by his former employer. In
addition, on the Effective Date, Executive shall be granted a non-qualified
stock option (for a term expiring August 20, 2007 or, if earlier, three years
after the date of Executive's termination from employment by the Company for
any reason other than Cause, as defined in Section 5.3, in which case the
term shall expire immediately) to purchase 500,000 shares of common stock of
the Company at a purchase price of $9.625 for each share purchased (the
"Option"). Executive's right to exercise the Option shall vest in increments
equal to 250,000 shares on August 20, 1999, an additional 125,000 shares on
August 20, 2000 (a total of 375,000 shares), and an additional 125,000 (all
500,000 shares) on August 20, 2001, provided that Executive remains employed
by the Company (except that in the case of death, disability, as defined in
Section 5.1, a Termination upon Change of Control, as defined in Section
6.1(f), or removal without cause, as provided in Section 5.4(b), Executive
shall be fully vested in the right to purchase all such shares). The terms of
the Option, to the extent not inconsistent with the provisions outlined in
this Section shall be made subject to the terms of the Company's stock option
plan, if one is developed by the Company for its other executives and
approved by the Company's shareholders in 1998.
1.10 Temporary Living and Moving Expenses. The Company shall provide
temporary housing for Executive in a suitable residence in the vicinity of
its offices and shall pay the cost of Executive commuting between such
residence and his current residence in Northville, Michigan until Executive
relocates his residence to Connecticut from Michigan or August 31, 1998, if
earlier. The Company shall also reimburse Executive for moving and home
seeking and buying expenses incurred by Executive in accordance with its
relocation policy for senior level executives and the Company shall purchase
Executive's residence in Northville, Michigan and Executive's vacation home
in Green Oak Township, Michigan (if Executive is unable to sell either or
both such properties within 90 days of placing either or both on the market)
for fair market value as determined in accordance with the Company's normal
policy for senior level executives. The Company shall also pay Executive a
tax equivalency bonus in an amount such that all federal, state and local
income taxes (calculated at the highest marginal rate) which may be due by
reason of any such expenses and the tax equivalency bonus being included in
Executive's taxable income will not reduce the net amount of reimbursement
that Executive is to receive hereunder.
2. Confidential Information. Executive recognizes and acknowledges
that by reason of Executive's employment by and service to the Company during
and, if applicable, after the Employment Term Executive will continue to have
access to certain confidential and proprietary information relating to the
business of the Company, which may include, but is not limited to, trade
secrets, trade "know-how", customer information, supplier information, cost
and pricing information, marketing and sales techniques, strategies and
programs, computer programs and software and financial information
(collectively referred to as "Confidential Information"). Executive
acknowledges that such Confidential Information is a valuable and unique
asset of the Company and Executive covenants that Executive will not, unless
expressly authorized in writing by the Trustees, at any time during the
course of Executive's employment use any Confidential Information or divulge
or disclose any Confidential Information to any person, firm or corporation
except in connection with the performance of Executive's duties for the
Company and in a manner consistent with the Company's policies regarding
Confidential Information. Executive also covenants that at any time after
the termination of such employment, directly or indirectly, Executive will
not use any Confidential Information or divulge or disclose any Confidential
Information to any person, firm or corporation, unless such information is in
the public domain through no fault of Executive or except when required to do
so by a court of law, by any governmental agency having supervisory authority
over the business of the Company or by any administrative or legislative body
(including a committee thereof) with apparent jurisdiction to order
Executive to divulge, disclose or make accessible such information, in which
case Executive will inform the Company in writing promptly of such required
disclosure, but in any event at least two business days prior to disclosure.
All written Confidential Information (including, without limitation, in any
computer or other electronic format) which comes into Executive's possession
during the course of Executive's employment shall remain the property of the
Company. Except as required in the performance of Executive's duties for the
Company, or unless expressly authorized in writing by the Trustees, Executive
shall not remove any written Confidential Information from the Company's
premises, except in connection with the performance of Executive's duties for
the Company and in a manner consistent with the Company's policies regarding
Confidential Information. Upon termination of Executive's employment,
Executive agrees immediately to return to the Company all written
Confidential Information in Executive's possession. For the purposes of
this Section 2, the term "Company" shall be deemed to include NU and the
Affiliates, as defined in Section 6.1(a), of NU and the Company.
3. Non-Competition; Non-Solicitation.
(a) During Executive's employment by the Company and for a period
of two years after Executive's termination of employment for any reason,
within the Company's "Service Area," as defined below, Executive will not,
except with the prior written consent of the Trustees, directly or
indirectly, own, manage, operate, join, control, finance or participate in
the ownership, management, operation, control or financing of, or be
connected as an officer, director, employee, partner, principal, agent,
representative, consultant or otherwise with, or use or permit Executive's
name to be used in connection with, any business or enterprise which is
engaged in any business that is competitive with any business or enterprise
in which the Company is engaged. For the purposes of this Section, "Service
Area" shall mean the geographic area within the states of Connecticut, Maine,
Massachusetts, New Hampshire, Rhode Island, and Vermont, or any other state
in which the Company, in the aggregate, generates 25% or more of its revenues
in the fiscal year of NU in which Executive's termination of employment
occurs. Executive acknowledges that the listed Service Area is the area in
which the Company presently does business.
(b) The foregoing restrictions shall not be construed to prohibit
the ownership by Executive of less than five percent (5%) of any class of
securities of any corporation which is engaged in any of the foregoing
businesses having a class of securities registered pursuant to the Securities
Exchange Act of 1934 (the "Exchange Act"), provided that such ownership
represents a passive investment and that neither Executive nor any group of
persons including Executive in any way, either directly or indirectly,
manages or exercises control of any such corporation, guarantees any of its
financial obligations, otherwise takes any part in its business, other than
exercising Executive's rights as a shareholder, or seeks to do any of the
foregoing.
(c) Executive further covenants and agrees that during Executive's
employment by the Company and for the period of two years thereafter,
Executive will not, directly or indirectly, (i) solicit, divert, take away,
or attempt to solicit, divert or take away, any of the Company's "Principal
Customers," defined for the purposes hereof to include any customer of the
Company, from which $100,000 or more of annual gross revenues are derived at
such time, or (ii) encourage any Principal Customer to reduce its patronage
of the Company.
(d) Executive further covenants and agrees that during Executive's
employment by the Company and for the period of two years thereafter,
Executive will not, except with the prior written consent of the Trustees,
directly or indirectly, solicit or hire, or encourage the solicitation or
hiring of, any person who was a managerial or higher level employee of the
Company at any time during the term of Executive's employment by the Company
by any employer other than the Company for any position as an employee,
independent contractor, consultant or otherwise. The foregoing covenant of
Executive shall not apply to any person after 12 months have elapsed
subsequent to the date on which such person's employment by the Company has
terminated.
(e) Nothing in this Section 3 shall be construed to prohibit
Executive from being connected as a partner, principal, shareholder,
associate, counsel or otherwise with another lawyer or a law firm which
performs services for clients engaged in any business or enterprise that is
competitive with any business or enterprise in which the Company is engaged,
provided that Executive is not personally involved, directly or indirectly,
in performing services for any such clients during the period specified in
Section 3(a) and provided further that such lawyer or law firm takes
reasonable precautions to screen Executive from participating for the period
specified in Section 3(a) in the representation of any such clients. The
parties agree that any such personal performance of services by Executive for
any such clients during such period would create an unreasonable risk of
violation by Executive of the provisions of Section 2 of this Agreement, and
Executive agrees (and the Company may elect) to notify in writing any lawyer
or law firm with which Executive may be connected during the period specified
in Section 3(a) of Executive's Agreement as set forth herein. Executive
agrees to notify the Company in writing in advance of the precautions to be
taken by such lawyer or law firm to screen Executive from any representation
of such competing client by such lawyer or law firm.
(f) For the purposes of this Section 3, the term "Company" shall
be deemed to include NU and the Affiliates, as defined in Section 6.1(a), of
NU and the Company.
4. Equitable Relief.
(a) Executive acknowledges and agrees that the restrictions
contained in Sections 2 and 3 are reasonable and necessary to protect and
preserve the legitimate interests, properties, goodwill and business of the
Company, that the Company would not have entered into this Agreement in the
absence of such restrictions and that irreparable injury will be suffered by
the Company should Executive breach any of the provisions of those Sections.
Executive represents and acknowledges that (i) Executive has been advised by
the Company to consult Executive's own legal counsel in respect of this
Agreement, and (ii) that Executive has had full opportunity, prior to
execution of this Agreement, to review thoroughly this Agreement with
Executive's counsel.
(b) Executive further acknowledges and agrees that a breach of any
of the restrictions in Sections 2 and 3 cannot be adequately compensated by
monetary damages. Executive agrees that the Company shall be entitled to
preliminary and permanent injunctive relief, without the necessity of proving
actual damages, as well as an equitable accounting of all earnings, profits
and other benefits arising from any violation of Sections 2 or 3 hereof,
which rights shall be cumulative and in addition to any other rights or
remedies to which the Company may be entitled. In the event that any of the
provisions of Sections 2 or 3 hereof should ever be adjudicated to exceed the
time, geographic, service, or other limitations permitted by applicable law
in any jurisdiction, it is the intention of the parties that the provision
shall be amended to the extent of the maximum time, geographic, service, or
other limitations permitted by applicable law, that such amendment shall
apply only within the jurisdiction of the court that made such adjudication
and that the provision otherwise be enforced to the maximum extent permitted
by law.
(c) If Executive breaches any of Executive's obligations under
Sections 2 or 3 hereof, and such breach constitutes "cause," as defined in
Section 5.3 hereof, or would constitute cause if it had occurred during the
Employment Term, the Company shall thereafter remain obligated only for the
compensation and other benefits provided in any plans, policies or practices
then applicable to Executive in accordance with the terms thereof.
(d) Executive irrevocably and unconditionally (i) agrees that any
suit, action or other legal proceeding arising out of Sections 2 or 3 hereof,
including without limitation, any action commenced by the Company for
preliminary and permanent injunctive relief and other equitable relief, may
be brought in the United States District Court for the District of
Connecticut, or if such court does not have jurisdiction or will not accept
jurisdiction, in any court of general jurisdiction in Hartford, Connecticut,
(ii) consents to the non-exclusive jurisdiction of any such court in any such
suit, action or proceeding, and (iii) waives any objection which Executive
may have to the laying of venue of any such suit, action or proceeding in any
such court. Executive also irrevocably and unconditionally consents to the
service of any process, pleadings, notices or other papers in a manner
permitted by the notice provisions of Section 10 hereof.
(e) Executive agrees that for a period of five years following the
termination of Executive's employment by the Company Executive will provide,
and that at all times after the date hereof the Company may similarly
provide, a copy of Sections 2 and 3 hereof to any business or enterprise (i)
which Executive may directly or indirectly own, manage, operate, finance,
join, control or of which he may participate in the ownership, management,
operation, financing, or control, or (ii) with which Executive may be
connected as an officer, director, employee, partner, principal, agent,
representative, consultant or otherwise, or in connection with which
Executive may use or permit to be used Executive's name; provided, however,
that this provision shall not apply in respect of Section 3 hereof after
expiration of the time periods set forth therein.
(f) For the purposes of this Section 4, the term "Company" shall
be deemed to include NU and the Affiliates, as defined in Section 6.1(a), of
NU and the Company.
5. Termination. The Employment Term shall terminate upon the
occurrence of any one of the following events:
5.1. Disability. The Company may terminate the Employment Term if
Executive is unable substantially to perform Executive's duties and
responsibilities hereunder to the full extent required by the Trustees by
reason of illness, injury or incapacity for six consecutive months, or for
more than six months in the aggregate during any period of twelve calendar
months; provided, however, that the Company shall continue to pay Executive's
Base Salary until the Company acts to terminate the Employment Term. If the
Company terminates the Employment Term, Executive shall be entitled to
receive (i) any amounts earned, accrued or owing but not yet paid under
Section 1 above, (ii) a continuation of his Base Salary until the end of the
Initial Employment Term, (iii) the Special Retirement Benefit regardless of
whether the fifth anniversary of the Effective Date occurred prior to the
termination, calculated on the basis of all Base Salary (including Base
Salary to be paid pursuant to clause (ii) above) and all service that would
have been credited through the end of the Initial Employment Term, and
calculated as if the last day of the Initial Employment Term were his early
retirement date for purposes of eligibility for early retirement as to the
Special Retirement Benefit if Executive has not then attained age 55;
provided, however, that commencement of such benefit and the actuarial
reduction for determining the amount of such benefit shall always be based on
his actual age, and (iv) any other benefits in accordance with the terms of
any applicable plans and programs of the Company. Otherwise, the Company
shall have no further liability or obligation to Executive for compensation
under this Agreement. Executive agrees, in the event of a dispute under this
Section 5.1, to submit to a physical examination by a licensed physician
selected by the Trustees.
5.2. Death. The Employment Term shall terminate in the event of
Executive's death. In such event, the Company shall pay to Executive's
executors, legal representatives or administrators, as applicable, an amount
equal to the installment of Executive's Base Salary set forth in Section 1.4
hereof for the month in which Executive dies and to Executive's surviving
spouse the Survivor Benefit. In addition, Executive's estate shall be
entitled to receive (i) any other amounts earned, accrued or owing but not
yet paid under Section 1 above and (ii) any other benefits in accordance with
the terms of any applicable plans and programs of the Company. Otherwise,
the Company shall have no further liability or obligation under this
Agreement to Executive's executors, legal representatives, administrators,
heirs or assigns or any other person claiming under or through Executive.
5.3. Cause. The Company may terminate the Employment Term, at any time,
for "cause" upon written notice, in which event all payments under this
Agreement shall cease, except for Base Salary to the extent already accrued,
but Executive shall remain entitled to any other benefits in accordance with
the terms of any applicable plans and programs of the Company but shall not
be entitled to the Special Retirement Benefit. For purposes of this
Agreement, Executive's employment may be terminated for "cause" if (i)
Executive is convicted of a felony, (ii) in the reasonable determination of
the Trustees, Executive has (x) committed an act of fraud, embezzlement, or
theft in connection with Executive's duties in the course of Executive's
employment with the Company, (y) caused intentional, wrongful damage to the
property of the Company or intentionally and wrongfully disclosed
Confidential Information, or (z) engaged in gross misconduct or gross
negligence in the course of Executive's employment with the Company or (iii)
Executive materially breached Executive's obligations under this Agreement
and shall not have remedied such breach within 30 days after receiving
written notice from the Trustees specifying the details thereof. For
purposes of this Agreement, an act or omission on the part of Executive shall
be deemed "intentional" only if it was not due primarily to an error in
judgment or negligence and was done by Executive not in good faith and
without reasonable belief that the act or omission was in the best interest
of the Company.
5.4. Termination Without Cause and Non-Renewal.
(a) The Company may remove Executive, at any time, without cause
from the position in which Executive is employed hereunder (in which case the
Employment Term shall be deemed to have ended) upon not less than 60 days'
prior written notice to Executive; provided, however, that, in the event that
such notice is given, Executive shall be under no obligation to render any
additional services to the Company and, subject to the provisions of Section
3 hereof, shall be allowed to seek other employment. Upon any such removal
or if the Company informs Executive that the Agreement will not be renewed
after December 31, 2002 or at the end of any subsequent renewal period,
Executive shall be entitled to receive, as liquidated damages for the failure
of the Company to continue to employ Executive, only the amount due to
Executive under the Company's then current severance pay plan for employees.
No other payments or benefits shall be due under this Agreement to Executive,
but Executive shall be entitled to any other benefits in accordance with the
terms of any applicable plans and programs of the Company. Notwithstanding
anything in this Agreement to the contrary, on or after the date Executive
attains age 65, no action by the Company shall be treated as a removal from
employment or non-renewal if on the effective date of such action Executive
satisfies all of the requirements for the executive or high policy-making
exception to applicable provisions of state and federal age discrimination
legislation.
(b) Notwithstanding the provisions of Section 5.4(a) (other than
the last sentence), in the event that Executive executes a written release
upon such removal or non-renewal, substantially in the form attached hereto
as Annex 1, (the "Release"), of any and all claims against the Company and
all related parties with respect to all matters arising out of Executive's
employment by the Company (other than any entitlements under the terms of
this Agreement or under any other plans or programs of the Company in which
Executive participated and under which Executive has accrued a benefit), or
the termination thereof, Executive shall be entitled to receive, in lieu of
the payment described in Section 5.4(a), which Executive agrees to waive,
(i) as liquidated damages for the failure of the Company to
continue to employ Executive, a single cash payment, within 30 days after the
effective date of the removal or non-renewal, equal to Executive's Base
Compensation, as defined in Section 6.1(b) below;
(ii) for a period equal to two years following the end of the
Employment Term, Executive and Executive's spouse and dependents shall be
eligible for a continuation of those Benefit Coverages, as in effect at the
time of such termination or removal, and as the same may be changed from time
to time, as if Executive had been continued in employment during said period
or to receive cash in lieu of such benefits or premiums, as applicable, where
such Benefit Coverages may not be continued (or where such continuation would
adversely affect the tax status of the plan pursuant to which the Benefit
Coverage is provided) under applicable law or regulations;
(iii) any other amounts earned, accrued or owing but not
yet paid under Section 1 above;
(iv) any other benefits in accordance with the terms of any
applicable plans and programs of the Company;
(v) as additional consideration for the non-competition and
non-solicitation covenant contained in Section 3, a single cash payment,
within 30 days after the effective date of the removal or non-renewal, equal
to Executive's Base Compensation, as defined in Section 6.1(b) below;
(vi) in addition, (w) Executive shall be entitled to the
Special Retirement Benefit without regard to the duration of his employment,
(x) Executive's years of service with the Company shall be increased by two
years following the end of the Employment Term and shall be taken into
account in determining the amount of the Special Retirement Benefit, (y) the
last day of the Initial Employment Term shall be treated as his early
retirement date for purposes of eligibility for early retirement as to the
Special Retirement Benefit if Executive has not then attained age 55;
provided, however, that commencement of such benefit and the actuarial
reduction for determining the amount of such benefit shall always be based on
his actual age, and (z) two years of Base Compensation shall be taken into
account as compensation during such additional two year period in determining
Executive's Special Retirement Benefit, but only if the effect is to increase
the amount of the Special Retirement Benefit; and
(vii) The Option, to the extent not already vested prior
to the removal or non-renewal, shall be fully vested and immediately
exercisable as if Executive had remained actively employed by the Company,
and satisfied all time requirements as to exercise, including the right of
exercise, where appropriate, within 36 months after the removal or
non-renewal.
5.5. Voluntary Termination. Executive may voluntarily terminate the
Employment Term upon 30 days' prior written notice for any reason. In such
event, after the effective date of such termination, no further payments
shall be due under this Agreement except that Executive shall be entitled to
the Special Retirement Benefit to the extent vested pursuant to Section 1.5
and any benefits due in accordance with the terms of any applicable plan and
programs of the Company.
6. Payments Upon a Change in Control.
6.1. Definitions. For all purposes of this Section 6, the following
terms shall have the meanings specified in this Section 6.1 unless the
context otherwise clearly requires:
(a) "Affiliate" shall mean an "affiliate" as defined in Rule 12b-2
of the General Rules and Regulations under the Exchange Act.
(b) "Base Compensation" shall mean, for a calendar year,
Executive's annualized Base Salary as would be reported for federal income
tax purposes on Form W-2 for such calendar year, together with any and all
salary reduction authorized amounts under any of the Company's benefit plans
or programs for such calendar year, and all short-term incentive compensation
at the target level to be paid to Executive in all employee capacities with
the Company attributable to such calendar year and taxable in the following
calendar year. "Base Compensation" shall be the higher of (i) Base
Compensation for the calendar year in which occurs the Change of Control or,
if no Change of Control occurs, the calendar year in which occurs the
involuntary termination; or (ii) Base Compensation for the full calendar
year immediately prior thereto. "Base Compensation" shall not include the
value of the Option, any subsequent stock options or any exercise thereunder.
(c) "Change of Control" shall mean the happening of any of the
following:
(i) When any "person," as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934 (the "Exchange Act"), other than
the Company, its Affiliates, or any Company or NU employee benefit plan
(including any trustee of such plan acting as trustee), is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of NU representing more than 20% of the
combined voting power of either (i) the then outstanding shares of common
stock of NU (the "Outstanding Common Stock") or (ii) the then outstanding
voting securities of NU entitled to vote generally in the election of
directors (the "Voting Securities"); or
(ii) Individuals who, as of the beginning of any twenty-four month
period, constitute the Trustees (the "Incumbent Trustees") cease for any
reason to constitute at least a majority of the Trustees or cease to be able
to exercise the powers of the majority of the Trustees, provided that any
individual becoming a trustee subsequent to the beginning of such period
whose election or nomination for election by the Company's stockholders was
approved by a vote of at least a majority of the trustees then comprising the
Incumbent Trustees shall be considered as though such individual were a
member of the Incumbent Trustees, but excluding, for this purpose, any such
individual whose initial assumption of office is in connection with an actual
or threatened election contest relating to the election of the Trustees of NU
(as such terms are used in Rule 14a-11 of Regulation 14A promulgated under
the Exchange Act); or
(iii) Consummation by NU of a reorganization, merger or
consolidation (a "Business Combination"), in each case, with respect to which
all or substantially all of the individuals and entities who were the
respective beneficial owners of the Outstanding Common Stock and Voting
Securities immediately prior to such Business Combination do not, following
consummation of all transactions intended to constitute part of such Business
Combination, beneficially own, directly or indirectly, more than 75% of,
respectively, the then outstanding shares of common stock and the combined
voting power of the then outstanding voting securities entitled to vote
generally in the election of directors, as the case may be, of the
corporation, business trust or other entity resulting from or being the
surviving entity in such Business Combination in substantially the same
proportion as their ownership immediately prior to such Business Combination
of the Outstanding Common Stock and Voting Securities, as the case may be; or
(iv) Consummation of a complete liquidation or dissolution of NU or
sale or other disposition of all or substantially all of the assets of NU
other than to a corporation, business trust or other entity with respect to
which, following consummation of all transactions intended to constitute part
of such sale or disposition, more than 75% of, respectively, the then
outstanding shares of common stock and the combined voting power of the then
outstanding voting securities entitled to vote generally in the election of
directors, as the case may be, is then owned beneficially, directly or
indirectly, by all or substantially all of the individuals and entities who
were the beneficial owners, respectively, of the Outstanding Common Stock and
Voting Securities immediately prior to such sale or disposition in
substantially the same proportion as their ownership of the Outstanding
Common Stock and Voting Securities, as the case may be, immediately prior to
such sale or disposition.
(d) "Termination Date" shall mean the date of receipt of a Notice
of Termination of this Agreement or any later date specified therein.
(e) "Termination of Employment" shall mean the termination of
Executive's actual employment relationship with the Company, including a
failure to renew the Agreement after August 20, 2002 or at the end of any
subsequent renewal period, in either case occasioned by the Company's action.
(f) "Termination upon a Change of Control" shall mean a
Termination of Employment upon or within two years after a Change of Control
either:
(i) initiated by the Company for any reason other than
Executive's (w) disability, as defined in Section 5.1 hereof, (x) death, (y)
retirement on or after attaining age 65, or (z) "cause," as defined in
Section 5.3 hereof, or (ii) initiated by Executive (A) upon any failure of
the Company materially to comply with and satisfy any of the terms of this
Agreement, including any material reduction by the Company of the authority,
duties or responsibilities of Executive, any reduction of Executive's
compensation or benefits due hereunder, or the assignment to Executive of
duties which are materially inconsistent with the duties of Executive's
position as defined in Section 1.2 above, or (B) if Executive is transferred,
without Executive's written consent, to a location that is more than 50 miles
from Executive's principal place of business immediately preceding the Change
of Control.
6.2. Notice of Termination. Any Termination upon a Change of Control
shall be communicated by a Notice of Termination to the other party hereto
given in accordance with Section 10 hereof. 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) briefly
summarizes the facts and circumstances deemed to provide a basis for a
Termination of Employment and the applicable provision hereof, and (iii) if
the Termination Date is other than the date of receipt of such notice,
specifies the Termination Date (which date shall not be more than 15 days
after the giving of such notice).
6.3. Payments upon Termination. Subject to the provisions of Section
6.6 hereof, in the event of Executive's Termination upon a Change of Control,
the Company agrees, in the event Executive executes the Release required by
Section 5.4(b), to pay to Executive, in a single cash payment, within thirty
days after the Termination Date, the greater of (i) Executive's Base
Compensation, as defined in Section 6.1(b), for the balance of the Initial
Employment Term minus one year, or (ii) two multiplied by Executive's Base
Compensation. The payment made under clause (i) or under clause (ii),
together with an additional year of Base Compensation shall be taken into
account as additional compensation over the period in which it would have
been paid in determining Executive's Special Retirement Benefit, but only if
the effect is to increase the amount of the Special Retirement Benefit. In
addition, all amounts, benefits and Benefit Coverages described in Section
5.4(b)(ii), (iii), (iv) and (v) shall also be due to Executive, provided that
in (ii) Benefit Coverages shall continue for at least three years instead of
two. In the event Executive fails or refuses to execute the Release required
by Section 5.4(b), the Company shall only pay to Executive, in a single cash
payment, within thirty days after the Termination Date, the amount due under
Section 5.4(a) above and, in addition, all other amounts and benefits
described in Section 5.4(a).
6.4. Other Payments, Special Retirement Benefit, Stock Option and Stock
Grants, etc. Subject to the provisions of Section 6.6 hereof, in the event
of Executive's Termination upon a Change of Control, and the execution of the
Release required by Section 5.4(b):
(a) Executive's years of service with the Company through the greater
of (i) the balance of the Initial Employment Term, or (ii) the 36th month
following the Termination Date shall be taken into account in determining
Executive's eligibility for, but not amount of cost sharing under, the
Company's retiree health plan and, in addition, such number of months shall
be added to Executive's age for this purpose;
(b) Executive's years of service with the Company through the greater
of (i) the balance of the Initial Employment Term, or (ii) the 36th month
following the Termination Date shall be taken into account in determining the
amount of, and Executive's eligibility for, the Special Retirement Benefit
and the last day of the Initial Employment Term shall be treated as his early
retirement date for purposes of eligibility for early retirement as to the
Special Retirement Benefit if Executive has not then attained age 55;
provided, however, that commencement of such benefit and the actuarial
reduction for determining the amount of such benefit shall always be based on
his actual age;
(c) On Executive's Termination Date, the Option and any subsequent
stock option grants previously granted to Executive, to the extent not
already vested prior to the Termination Date, shall be fully vested and
immediately exercisable as if Executive had remained actively employed by the
Company and satisfied all requirements as to exercise, including the right of
exercise where appropriate within 36 months of the removal or non-renewal,
and if the Change of Control results in the Voting Securities of NU ceasing
to be traded on a national securities exchange or though the national market
system of the National Association of Securities Dealers Inc., the price at
which the Option shall be exercised shall be the average of the closing
prices for the five trading days preceding the day such Voting Securities
cease trading.
6.5. Non-Exclusivity of Rights. Nothing in this Agreement shall prevent
or limit Executive's continuing or future participation in or rights under
any benefit, bonus, incentive or other plan or program provided by the
Company and for which Executive may qualify; provided, however, that if
Executive becomes entitled to and receives all of the payments provided for
in this Agreement, Executive hereby waives Executive's right to receive
payments under any severance plan or similar program applicable to all
employees of the Company.
6.6. Certain Increase in Payments.
(a) Anything in this Agreement to the contrary notwithstanding, in
the event that it shall be determined that any payment or distribution by the
Company to or for the benefit of Executive, whether paid or payable or
distributed or distributable pursuant to the terms of this Agreement or
otherwise (the "Payment"), would constitute an "excess parachute payment"
within the meaning of Section 280G of the Internal Revenue Code of 1986, as
amended (the "Code"), Executive shall be paid an additional amount (the
"Gross-Up Payment") such that the net amount retained by Executive after
deduction of any excise tax imposed under Section 4999 of the Code, and any
federal, state and local income and employment tax and excise tax imposed
upon the Gross-Up Payment shall be equal to the Payment. For purposes of
determining the amount of the Gross-Up Payment, Executive shall be deemed to
pay federal income tax and employment taxes at the highest marginal rate of
federal income and employment taxation in the calendar year in which the
Gross-Up Payment is to be made and state and local income taxes at the
highest marginal rate of taxation in the state and locality of Executive's
residence on the Termination Date, net of the maximum reduction in federal
income taxes that may be obtained from the deduction of such state and local
taxes.
(b) All determinations to be made under this Section 6 shall be
made by the Company's independent public accountant immediately prior to the
Change of Control (the "Accounting Firm"), which firm shall provide its
determinations and any supporting calculations both to the Company and
Executive within 10 days of the Termination Date. Any such determination by
the Accounting Firm shall be binding upon the Company and Executive. Within
five days after the Accounting Firm's determination, the Company shall pay
(or cause to be paid) or distribute (or cause to be distributed) to or for
the benefit of Executive such amounts as are then due to Executive under this
Agreement.
(c) In the event that upon any audit by the Internal Revenue
Service, or by a state or local taxing authority, of the Payment or Gross-Up
Payment, a change is finally determined to be required in the amount of taxes
paid by Executive, appropriate adjustments shall be made under this Agreement
such that the net amount which is payable to Executive after taking into
account the provisions of Section 4999 of the Code shall reflect the intent
of the parties as expressed in subsection (a) above, in the manner determined
by the Accounting Firm.
(d) All of the fees and expenses of the Accounting Firm in
performing the determinations referred to in subsections (b) and (c) above
shall be borne solely by the Company. The Company agrees to indemnify and
hold harmless the Accounting Firm of and from any and all claims, damages and
expenses resulting from or relating to its determinations pursuant to
subsections (b) and (c) above, except for claims, damages or expenses
resulting from the gross negligence or willful misconduct of the Accounting
Firm.
7. Survivorship. The respective rights and obligations of the parties
under this Agreement shall survive any termination of Executive's employment
to the extent necessary to the intended preservation of such rights and
obligations.
8. Mitigation. Executive shall not be required to mitigate the amount
of any payment or benefit provided for in this Agreement by seeking other
employment or otherwise and there shall be no offset against amounts due
Executive under this Agreement on account of any remuneration attributable to
any subsequent employment that Executive may obtain.
9. Arbitration; Expenses. In the event of any dispute under the
provisions of this Agreement other than a dispute in which the primary relief
sought is an equitable remedy such as an injunction, the parties shall be
required to have the dispute, controversy or claim settled by arbitration in
the City of Hartford, Connecticut in accordance with National Rules for the
Resolution of Employment Disputes then in effect of the American Arbitration
Association, before a panel of three arbitrators, two of whom shall be
selected by the Company and Executive, respectively, and the third of whom
shall be selected by the other two arbitrators. Any award entered by the
arbitrators shall be final, binding and nonappealable (except as provided in
Section 52-418 of the Connecticut General Statutes) and judgment may be
entered thereon by either party in accordance with applicable law in any
court of competent jurisdiction. This arbitration provision shall be
specifically enforceable. The arbitrators shall have no authority to modify
any provision of this Agreement or to award a remedy for a dispute involving
this Agreement other than a benefit specifically provided under or by virtue
of the Agreement. If Executive prevails on any material issue which is the
subject of such arbitration or lawsuit, the Company shall be responsible for
all of the fees of the American Arbitration Association and the arbitrators
and any expenses relating to the conduct of the arbitration (including the
Company's and Executive's reasonable attorneys' fees and expenses).
Otherwise, each party shall be responsible for its own expenses relating to
the conduct of the arbitration (including reasonable attorneys' fees and
expenses) and shall share the fees of the American Arbitration Association.
10. Notices. All notices and other communications required or
permitted under this Agreement or necessary or convenient in connection
herewith shall be in writing and shall be deemed to have been given when hand
delivered or mailed by registered or certified mail, as follows (provided
that notice of change of address shall be deemed given only when received):
If to the Company, to:
Northeast Utilities
X.X. Xxx 000
Xxxxxxxx, XX 00000-0000
Attention: Senior Vice President, Secretary and General Counsel
With a required copy to:
Xxxxxx, Xxxxx & Xxxxxxx
0000 Xxx Xxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000-0000
Attention: Xxxxxx X. Xxxxxxxxxxxx, Esquire
If to Executive, to:
Xxxxxxx X. Xxxxxx
000 Xxxxxxxx
Xxxxxxxxxx, XX 00000
With a required copy to:
Xxxxxxx & Xxxxxxx
Xxx Xxxxxxxx Xxx
Xxxxxxxx, XX 00000-0000
Attention: Xxxxx Xxxxxx, Esquire
or to such other names or addresses as the Company or Executive, as the case
may be, shall designate by notice to each other person entitled to receive
notices in the manner specified in this Section.
11. Contents of Agreement; Amendment and Assignment.
(a) This Agreement sets forth the entire understanding between the
parties hereto with respect to the subject matter hereof and cannot be
changed, modified, extended or terminated except upon written amendment
approved by the Trustees and executed on its behalf by a duly authorized
officer and by Executive.
(b) All of the terms and provisions of this Agreement shall be
binding upon and inure to the benefit of and be enforceable by the respective
heirs, executors, administrators, legal representatives, successors and
assigns of the parties hereto, except that the duties and responsibilities of
Executive under this Agreement are of a personal nature and shall not be
assignable or delegatable in whole or in part by Executive. The Company
shall require any successor (whether direct or indirect, by purchase, merger,
consolidation, reorganization or otherwise) to all or substantially all of
the business or assets of the Company, by agreement in form and substance
satisfactory to Executive, expressly to assume and agree to perform this
Agreement in the same manner and to the extent the Company would be required
to perform if no such succession had taken place.
12. Severability. If any provision of this Agreement or application
thereof to anyone or under any circumstances is adjudicated to be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall
not affect any other provision or application of this Agreement which can be
given effect without the invalid or unenforceable provision or application
and shall not invalidate or render unenforceable such provision or
application in any other jurisdiction. If any provision is held void,
invalid or unenforceable with respect to particular circumstances, it shall
nevertheless remain in full force and effect in all other circumstances.
13. Remedies Cumulative; No Waiver. No remedy conferred upon a party
by this Agreement is intended to be exclusive of any other remedy, and each
and every such remedy shall be cumulative and shall be in addition to any
other remedy given under this Agreement or now or hereafter existing at law
or in equity. No delay or omission by a party in exercising any right,
remedy or power under this Agreement or existing at law or in equity shall be
construed as a waiver thereof, and any such right, remedy or power may be
exercised by such party from time to time and as often as may be deemed
expedient or necessary by such party in its sole discretion.
14. Beneficiaries/References. Executive shall be entitled, to the
extent permitted under any applicable law, to select and change a beneficiary
or beneficiaries to receive any compensation or benefit payable under this
Agreement following Executive's death by giving the Company written notice
thereof. In the event of Executive's death or a judicial determination of
Executive's incompetence, reference in this Agreement to Executive shall be
deemed, where appropriate, to refer to Executive's beneficiary, estate or
other legal representative.
15. Miscellaneous. All section headings used in this Agreement are for
convenience only. This Agreement may be executed in counterparts, each of
which is an original. It shall not be necessary in making proof of this
Agreement or any counterpart hereof to produce or account for any of the
other counterparts.
16. Withholding. The Company may withhold from any payments under this
Agreement all federal, state and local taxes as the Company is required to
withhold pursuant to any law or governmental rule or regulation. Executive
shall bear all expense of, and be solely responsible for, all federal, state
and local taxes due with respect to any payment received under this
Agreement.
17. Governing Law. This Agreement shall be governed by and interpreted
under the laws of the State of Connecticut without giving effect to any
conflict of laws provisions.
18. Adoption by Affiliates; Obligations.
(a) The obligations under this Agreement shall, in the first instance,
be paid and satisfied by the Company; provided, however, that the Company
will use its best efforts to cause NU and each entity in which NU (or its
successors or assigns) now or hereafter holds, directly or indirectly, more
than a 50 percent voting interest (an "Employer") to approve and adopt this
Agreement and, by such approval and adoption, to be bound by the terms hereof
as though a signatory hereto. If the Company shall be dissolved or for any
other reason shall fail to pay and satisfy the obligations, each individual
Employer shall thereafter shall be jointly and severally liable to pay and
satisfy the obligations to Executive.
(b) The Declaration of Trust of NU provides that no shareholder of NU
shall be held to any liability whatever for the payment of any sum of money,
or for damages or otherwise under any contract, obligation or undertaking
made, entered into or issued by the trustees of NU or by any officer, agent
or representative elected or appointed by the trustees and no such contract,
obligation or undertaking shall be enforceable against the trustees or any of
them in their or his individual capacities or capacity and all such
contracts, obligations and undertakings shall be enforceable only against the
trustees as such and every person, firm, association, trust and corporation
having any claim or demand arising out of any such contract, obligation or
undertaking shall look only to the trust estate for the payment or
satisfaction thereof. Any liability for benefits under this Agreement
incurred by NU shall be subject to the provisions of this Subsection (b).
19. Establishment of Trust. The Company may establish an irrevocable
trust fund pursuant to a trust agreement to hold assets to satisfy any of its
obligations under this Agreement. Funding of such trust fund shall be
subject to the Trustees's discretion, as set forth in the agreement pursuant
to which the fund will be established.
IN WITNESS WHEREOF, the undersigned, intending to be legally bound, have
executed this Agreement as of the date first above written.
NORTHEAST UTILITIES
By:/S/XXXXXX X.WAX
/S/XXXXXXX X. XXXXXX Name: Xxxxxx X. Wax
Title: Senior Vice President and
General Counsel
APPENDIX A
The Special Retirement Benefit described in Section 1.5 of this
Agreement shall be calculated, subject to the modifications set forth in 1, 2
and 3 below, in accordance with the benefit formula of the Supplemental
Executive Retirement Plan for Employees of CMS Energy/Consumers Energy
Company (the "Consumers SERP"), a copy of which follows. A copy of the
Pension Plan for Employees of Consumers Power Company (the "Consumers Pension
Plan") is also included because the Consumers SERP uses certain terms defined
in the Consumers Pension Plan.
In calculating the Special Retirement Benefit, the following
modifications shall apply to the benefit formula set forth in the Consumers
SERP:
1. The term "Executive Incentive Compensation" in the Consumers
SERP shall refer to any short-term incentive compensation programs
established by the Company for its senior level executives, as described in
Section 1.7 of this Agreement and any long-term incentive compensation
programs established by the Company for its senior level executives, as
described in Section 1.8 of this Agreement; provided, however, that in the
event that the Target Benefit under the Supplemental Plan is amended in the
future to eliminate or modify the use of long-term incentive compensation
from or in its calculation, as applicable, then long-term incentive
compensation shall be eliminated or modified in the same manner and to the
same extent in this calculation.
2. No reduction shall be made pursuant to Section V.1(ii) of the
Consumers SERP for any benefits payable under the Consumers Pension Plan.
3. Payment of the Special Retirement Benefit shall not be
conditioned on a payment under the Consumers Pension Plan.
ANNEX 1
CONFIDENTIAL SEPARATION AGREEMENT
AND GENERAL RELEASE
THIS AGREEMENT, made and entered into on this day of ,
, by and between Northeast Utilities, a Massachusetts business trust,
with its principal office in West Springfield, Massachusetts, (together with
each direct and indirect affiliated company that has adopted the Employment
Agreement entered into as of August 20, 1997 (the "Employment Agreement"),
with , hereinafter, the "Company"), and , a resident of
, Connecticut ("Executive").
W I T N E S S E T H:
WHEREAS, the Company had heretofore employed Executive under the
Employment Agreement; and
WHEREAS, Executive's employment [has been terminated\has not been
renewed]; and
WHEREAS, the Company and Executive wish to enter into an agreement
to provide for a mutual release as to any claims including, without
limitation, claims that might be asserted by Executive under the Employment
Agreement and the Age Discrimination in Employment Act, as further described
herein, and reaffirm Executive's right to indemnification;
NOW, THEREFORE, in consideration of the mutual promises contained
herein, the parties hereto, intending to be legally bound, hereby agree as
follows:
1. The Company and Executive hereby agree that [Executive's
termination of employment\the non-renewal] shall be effective on ,
and that the Employment Agreement shall continue only to the extent provided
therein as to obligations that survive the termination of Executive's
employment.
2. Executive agrees and acknowledges that the Company, on a
timely basis, has paid, or agreed to pay, to Executive all other amounts due
and owing based on Executive's prior services in accordance with the terms of
the Employment Agreement or any other contract with Executive, whether
express or implied, and that the Company has no obligation, contractual or
otherwise to Executive, except as provided herein, in the Employment
Agreement or any other such contract with Executive, nor does it have any
obligation to hire, rehire or re-employ Executive in the future.
3. In full and complete settlement of any claims that Executive
may have against the Company, including any possible violations of the Age
Discrimination in Employment Act, 29 U.S.C. Section 621 et seq., ("ADEA") in
connection with Executive's termination of employment, and for and in
consideration of the undertakings of the Company described herein, Executive
does hereby REMISE, RELEASE, AND FOREVER DISCHARGE the Company, and each of
its subsidiaries and affiliates, their officers, directors, shareholders,
partners, employees and agents, and their respective successors and assigns,
heirs, executors and administrators (hereinafter all included within the term
"the Company"), of and from any and all manner of actions and causes of
actions, suits, debts, claims and demands whatsoever in law or in equity,
which Executive ever had, now has, or hereafter may have, or which
Executive's heirs, executors or administrators hereafter may have, by reason
of any matter, cause or thing whatsoever from the beginning of Executive's
employment to the date of this Agreement; and particularly, but without
limitation of the foregoing general terms, any claims arising from or
relating in any way to Executive's employment relationship or the Employment
Agreement to the extent of any obligation that does not survive Executive's
[termination of employment/non-renewal] and Executive's termination from that
employment relationship, including but not limited to, any claims which have
been asserted, could have been asserted, or could be asserted now or in the
future under any federal, state or local laws, including any claims under
ADEA, Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. Section
2000e et seq. ("Title VII"), the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), the Rehabilitation Act of 1973, the Americans with
Disabilities Act, the Family and Medical Leave Act, the Energy Reorganization
Act of 1974, as amended, Section 11(c) of the Occupational Safety and Health
Act, and the Energy Policy Act, and any common law claims now or hereafter
recognized and all claims for counsel fees and costs. Notwithstanding the
foregoing, nothing contained in this Agreement shall prevent Executive from
requiring the Company to fulfill its obligations under this Agreement, under
the Employment Agreement, to the extent of any continuing obligations
thereunder, under any employee benefit plan, as defined in Section 3(3) of
ERISA, maintained by the Company and in which Executive participated or any
other contract with Executive, whether express or implied.
Nothing in this Agreement shall be construed to prohibit Executive
from reporting any suspected instance of illegal activity of any nature, any
nuclear safety concern, any workplace safety concern, or any public safety
concern to the Nuclear Regulatory Commission (NRC), the United States
Department of Labor, or any other federal or state governmental agency. This
Agreement shall not be construed to prohibit Executive from providing
information to the NRC or to any other federal or state governmental agency
or governmental officials, or testifying in any civil or criminal proceedings
concerning any matter. This Agreement shall not be construed as a waiver or
withdrawal of safety concerns, if any, which Executive may have reported to
the NRC, or the withdrawal of participation by Executive in any NRC
proceedings.
Nothing in this Agreement shall limit or impair any right Executive
may otherwise have to indemnity and defense by the Company, and,
notwithstanding any contrary provision of this Agreement, (i) the Company
shall indemnify and defend Executive in connection with any action, suit or
proceeding in which Executive may be involved or with which Executive may be
threatened by reason of Executive's being or having been an officer of the
Company in the same manner contemplated by (including the payment or
advancement of any reasonable expenses as incurred) and to the fullest extent
permitted by the Declaration of Trust of Northeast Utilities as of the date
hereof, unless later limited in accordance with applicable law, or under
applicable law, (in which case Executive shall notify the Company within five
business days after receiving service of process as to the commencement of
the action, suit or proceeding and give the Company the right to control the
defense of any such action, suit or proceeding, provided that no delay in
giving such notice shall result in a forfeiture of any rights by Executive
unless, and then only to the extent that, the Company is actually prejudiced
by such delay), and (ii) Executive may join the Company in any action, suit
or proceeding, or bring any action, suit or proceeding against the Company,
as may be necessary for the protection or enforcement of such rights of
indemnification and defense by the Company.
4. Except to the extent permitted by paragraph 3, Executive
further agrees and covenants that neither Executive, nor any person,
organization or other entity on Executive's behalf, will file, charge, claim,
xxx or cause or permit to be filed, charged, or claimed, any action for
damages, including injunctive, declaratory, monetary or other relief against
the Company, involving any matter occurring at any time in the past up to the
date of this Agreement, or involving any continuing effects of any actions or
practices which may have arisen or occurred prior to the date of this
Agreement, including any charge of discrimination under ADEA, Title VII, the
Workers' compensation Act or state or local laws. In addition, Executive
further agrees and covenants that should Executive, or any other person,
organization or entity on Executive's behalf, file, charge, claim, xxx or
cause or permit to be filed, charged, or claimed, any action for damages,
including injunctive, declaratory, monetary or other relief, despite
Executive's agreement not to do so under this Agreement, or should Executive
otherwise fail to abide, in any material respect, by any of the terms of this
Agreement, then the Company will be relieved of all further obligations owed
under the Employment Agreement and this Agreement, Executive will forfeit all
monies paid to Executive under the Employment Agreement following
Executive's [termination of employment/non-renewal] and Executive will pay
all of the costs and expenses of the Company (including reasonable attorneys'
fees) incurred in the defense of any such action or undertaking.
5. In full and complete settlement of any claims that the Company
may have against Executive, other than the fulfillment of Executive's
obligations under this Agreement or under the Employment Agreement, and for
and in consideration of the undertakings of Executive described herein, the
Company does hereby REMISE, RELEASE, AND FOREVER DISCHARGE Executive and
Executive's heirs, executors and administrators (hereinafter all included
within the term "Executive"), of and from any and all manner of actions and
causes of actions, suits, debts, claims and demands whatsoever in law or in
equity, which the Company ever had, now has, or hereafter may have, by reason
of any civil (but specifically not any criminal act) matter, cause or thing
whatsoever by reason of Executive's being or having been an officer of the
Company from the beginning of Executive's employment with the Company to the
date of this Agreement; and particularly, but without limitation of the
foregoing general terms, any claims arising from or relating in any way to
actions taken by Executive by reason of Executive's being or having been an
officer of the Company and Executive's termination from those relationships
with the Company.
6. The Company further agrees and covenants that neither it, nor
any person, organization or other entity on its behalf, will file, charge,
claim, xxx or cause or permit to be filed, charged, or claimed, any action
for damages, including injunctive, declaratory, monetary or other relief
against Executive, involving any matter occurring at any time in the past up
to the date of this Agreement, or involving any continuing effects of any
actions or practices which may have arisen or occurred prior to the date of
this Agreement, by reason of Executive's being or having been an officer of
the Company, so long as Executive meets, in all material respects,
Executive's obligations under this Agreement and the Employment Agreement.
In addition, the Company further agrees and covenants that should it, or any
other person, organization or entity on its behalf, file, charge, claim, xxx
or cause or permit to be filed, charged, or claimed, any action for damages,
including injunctive, declaratory, monetary or other relief, despite its
agreement not to do so under this Agreement, then it will pay all of the
costs and expenses of Executive (including reasonable attorneys' fees)
incurred in the defense of any such action or undertaking.
7. Executive hereby agrees and acknowledges that under this
Agreement, the Company has agreed to provide Executive with compensation and
benefits that are in addition to any amounts to which Executive otherwise
would have been entitled under the Employment Agreement or otherwise in the
absence of this Agreement, and that such additional compensation is
sufficient to support the covenants and agreements by Executive herein.
8. Executive and the Company, its officers and directors, will
not, disparage the name, business reputation or business practices of the
other. In addition, by signing this Agreement, Executive agrees not to
pursue any internal grievance with the Company.
9. Executive hereby certifies that Executive has read the terms of
this Agreement, that Executive has been advised by the Company to consult
with an attorney and that Executive understands its terms and effects.
Executive acknowledges, further, that Executive is executing this Agreement
of Executive's own volition, without any threat, duress or coercion and with
a full understanding of its terms and effects and with the intention, as
expressed in paragraph 3 hereof, of releasing all claims recited herein in
exchange for the consideration described herein, which Executive acknowledges
is adequate and satisfactory to Executive provided the Company meets all of
its obligations under this Agreement. The Company has made no
representations to Executive concerning the terms or effects of this
Agreement other than those contained in this Agreement.
10. Executive hereby acknowledges that Executive was presented
with this Agreement on , , and that Executive was informed that
Executive had the right to consider this Agreement and the release contained
herein for a period of twenty-one (21) days prior to execution. Executive
also understands that Executive has the right to revoke this Agreement for a
period of seven (7) days following execution, by giving written notice to the
Company at 000 Xxxxxx Xxxxxx, Xxxxxx, XX 00000, in which event the provisions
of this Agreement shall be null and void, and the parties shall have the
rights, duties, obligations and remedies afforded by applicable law.
11. This Agreement shall be interpreted and enforced under the
laws of the State of Connecticut.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
on the day and year first above written.
ATTEST: NORTHEAST UTILITIES
By:
Secretary
Witness Executive
