AMENDED AND RESTATED EMPLOYMENT AGREEMENT
AGREEMENT dated as of July 14, 1999, between ENERGYNORTH,
INC., a New Hampshire corporation (the "Company") and XXXXXX X.
XXXXXXXX, residing in Bedford, New Hampshire (the "Executive").
WHEREAS, the Executive has been employed by the Company or
its subsidiaries for thirty (30) years in various executive
positions and has performed valuable services to the Company; and
WHEREAS, the Company and the Executive wish to amend and
restate the terms of that certain Employment Agreement dated as
of December 1, 1998 between the Company and the Executive; and
WHEREAS the Executive is willing to continue in the employ
of the Company, and the Company desires to retain the services of
the Executive;
NOW, THEREFORE, in consideration of the foregoing and the
respective covenants and agreements of the Executive and the
Company herein contained, the parties hereto agree as follows:
1. Employment.
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2. The Company agrees to employ the Executive and,
subject to Section 2, may assign the Executive to work for it and
for any subsidiary or affiliated company, and the Executive
agrees to perform the duties assigned to him upon the terms and
conditions herein provided.
3. Position and Responsibilities.
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4. The Company shall employ the Executive and the
Executive agrees to serve, as President & Chief Executive Officer
with such duties and responsibilities as are customarily assigned
to an individual serving in such capacity or any other comparable
executive office to which he is elected that does not represent a
material diminution from the title, duties and responsibilities
of the office of President & Chief Executive Officer for the term
and on the conditions hereinafter set forth. The Executive
agrees to perform such services not inconsistent with his
position as shall be assigned to him by the Board of Directors of
the Company (the "Board"). If elected, the Executive shall also
serve as an officer of any of the Company's subsidiary or
affiliated corporations as may be requested by the Board.
5. Term of Employment:
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6. The period of the Executive's employment
under this Agreement shall be deemed to have commenced
as of December 1, 1998 and shall continue through March 31, 2003.
7. Compensation.
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For all services to be rendered by the Executive in any
capacity during the period of his employment under this
Agreement, including, without limitation, services as an
executive, officer, director, or member of any committee of the
Company or of any subsidiary, affiliate or division thereof, the
Company will pay or cause to be paid to the Executive and will
provide or cause to be provided to the Executive the following:
(a) Salary. The Executive shall be compensated by the
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Company for his services in such capacities at the aggregate base
salary rate of two hundred seventy thousand dollars ($270,000)
per year or such higher rate as the Board may, in its discretion,
determine, payable in equal installments no less frequently than
monthly. In addition, the Executive shall be compensated by the
Company crediting to his Deferred Compensation Account,
maintained in accordance with the Deferred Compensation Agreement
between the Executive and the Company, as amended or replaced,
such amount as the Board may, in its discretion, determine,
payable in equal installments no less frequently than monthly.
Incentive Compensation. The Executive shall be
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entitled to participate in any existing or future incentive
compensation, stock option, stock purchase or other bonus plans
covering the employees of the Company (or any subsidiary or
affiliate) on the same basis as other officers, but in any event,
no less favorable than that in effect on December 1, 1998 and
where applicable, in any such plans of any subsidiary, affiliate
or division thereof from which he receives compensation.
Deferred Compensation. The Executive shall have the
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right to defer what would otherwise be current compensation in
accordance with a Deferred Compensation Agreement entered into
between the Executive and the Company effective as of November
30, 1993, as amended or replaced. The Executive, may, in
addition, be compensated by the Company crediting amounts to his
Deferred Compensation Account, maintained in accordance with such
Deferred Compensation Agreement, as such intervals during each
year as the Company may determine.
(d) Automobile. The Company shall provide to the Executive
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an automobile for his exclusive use in accordance with Company
policy, and in any event on a basis no less favorable than that
enjoyed by him at the date of this Agreement.
(e) Vacations. The Executive shall be entitled to vacation
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pursuant to that policy applicable to other employees of similar
rank and stature at the Company.
(f) Expenses.
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The Company (or its subsidiaries or affiliates, as the
case may be) shall reimburse the Executive for all reasonable
expenses, including travel, and other disbursements incurred by
him for or on behalf of the Company (or its subsidiaries or
affiliates) in the performance of his duties hereunder consistent
with the current reimbursement policies of the Company, but in no
event less favorable than the reimbursement policies in existence
on the effective date of this Agreement.
1. Participation in Benefit and Incentive Plans.
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2. The Executive shall participate in any retirement,
pension, group life, health or accident insurance, stock option,
stock purchase, restricted stock, bonus or any other employee
benefit or incentive plans generally available to the executives
and employees of the Company (or any subsidiary or affiliate),
whether now in force or hereafter adopted, in accordance with
their terms. In the event the Executive is employed by the
Company pursuant to this Agreement and elects to retire under the
provisions of the EnergyNorth, Inc. Retirement Plan for Salaried
Employees ("Pension Plan"), the Executive shall be entitled to
the same post-retirement medical, life and other applicable
benefits that other officer level executives at the Company
receive upon retirement in accordance with the Company's then
existing administrative policies; and further, the Executive
shall be entitled to receive post-retirement medical, life and
other applicable benefits that other officer level executives at
the Company receive upon retirement in accordance with the
Company's then existing administrative policies if within five
years after a Change of Control of the Company, the Executive is
discharged without Cause or resigns for Good Reason as each of
those terms is defined in the Amended and Restated Management
Continuity Agreement ("MCA") between the Executive and the
Company, dated as of the date hereof.
3. Termination of Employment
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(a) Discharge for Cause. Notwithstanding any of the
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foregoing provisions of this Agreement, the Board may, subject to
this Section 7(a), discharge the Executive for Cause at any time
during the term of this Agreement. For the purposes of this
Section 7 cause shall mean: (i) conviction of a felony or crime
involving an act of moral turpitude, dishonesty or misfeasance,
in each case that substantially interferes with the orderly
business of the Company or any of its subsidiaries, (ii) refusal
of the Executive to follow or material neglect by the Executive
of reasonable requests of the Company made pursuant to this
Agreement (other than any such refusal or neglect resulting from
incapacity due to physical or mental illness), and (iii)
willfully engaging in conduct that substantially interferes with
or damages the standing or reputation of the Company or any of
its subsidiaries; provided, however, no termination for Cause
pursuant to either clause (ii) or (iii) hereof shall be effective
unless the Company shall have first provided the Executive (A) 30
days written notice in the manner contemplated by Section 15
setting forth in reasonable detail the Company's basis for such
termination, including the manner in which the Board believes the
Executive has not substantially performed his duties and (B) an
opportunity to cure any deficiencies noted by the Company in such
notice that the Executive shall not have reasonably addressed
(and if so reasonably addressed, shall be deemed cured) prior to
the expiration of such 30-day period (the "For Cause Termination
Date"). In the event of termination of employment for Cause,
this Agreement and all of the rights and obligations of the
parties hereto shall forthwith terminate, except where this
Agreement expressly provides that any provisions survive
termination of this Agreement. For purposes of this Section
7(a), no act or failure to act by the Executive shall be
considered "willful" unless it is done, or omitted to be done, in
bad faith and without reasonable belief that the Executive's
action or omission was in the best interests of the Company.
(b) Termination by the Company. If the Company terminates
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the Executive prior to termination of this Agreement (except for
Cause), the Company shall pay semi-monthly to the Executive, or
if he is not living, to his estate or to his beneficiary
designated hereunder, as the case may be, as severance pay and as
liquidated damages an amount equal to one-half the average
monthly rate of the Executive's salary paid and accrued including
any amount the Executive has elected to defer during the 12
months immediately prior to his termination of employment plus
one-twenty-fourth (1/24) of the
greater of (A) the previous three years' annual average total
incentive compensation award earned under the EnergyNorth, Inc.
Key Employee Performance and Equity Incentive Plan (the
"Incentive Plan") to the Executive, including any amounts the
Executive has elected to defer and (B) the target level of
incentive compensation under the Incentive Plan for the
year in which such termination occurs. Such payments shall
commence on the last day of the month during which such
termination occurs and shall continue through the end of the term
of this Agreement. The Executive shall continue to receive
medical, dental, vision and life insurance benefits paid by the
Company which shall continue through the end of the term of this
Agreement and at the time the Executive elects to retire under
the provisions of the Pension Plan, the Executive shall receive
post-retirement medical benefits and life insurance in accordance
with the Company's administrative policies in effect at the date
of termination.
(c) The Executive shall not be required to mitigate the
amount of any payment or benefits provided by this Section 7 by
seeking other employment or otherwise, and if the Executive does
accept other employment, any payment or benefits hereunder shall
not be reduced by any compensation earned or benefits received by
the Executive as a result of such employment.
(d) In addition to the severance payment described in the
first paragraph of this Section 7(b), if the Company terminates
the Executive prior to the termination of this Agreement (except
for Cause), the Company shall pay to the Executive in one
payment, within ten days of the Date of Termination (as defined
below), an amount of cash equal to the product of (1) the number
of shares of Company Common Stock forfeited by the Executive
pursuant to Section 9.1 of the EnergyNorth, Inc. Key Employee
Performance and Equity Incentive Plan and (2) the average closing
prices of Company Common Stock on the New York Stock Exchange on
the five trading days ending on the Date of Termination (as
defined below).
(e) If the Company terminates the Executive prior to the
termination of this Agreement, the Company's obligations to the
Executive shall be limited to those specified in this Section
7(b). It is understood that the Company shall not be under any
obligation to make payments pursuant to this Section 7(b) upon
any termination of employment which gives rise to payments under
the MCA.
(f) Executive's Termination for Cause or Death. If the
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Executive is terminated for Cause under Section 7(a) hereunder,
or is unwilling to perform services hereunder, or dies while
employed, the Company shall have no further obligation hereunder
to make payments to the Executive beyond the Date of Termination
(as defined below) of employment but shall be responsible for and
obligated to pay to the Executive or his estate, as the case may
be, all accrued but unpaid compensation hereunder.
(g) Disability.
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In the event that the Executive, because of
accident, disability or physical or mental illness, is incapable
of performing the essential functions of the job with or without
reasonable accommodation, the Company shall have the right to
terminate the Executive's employment under this agreement upon
thirty (30) days' written notice to the Executive. In the event
of any determination pursuant to this Section 7(d), the Company
shall make semi-monthly payments to the Executive in an amount
equal to one-half of the monthly rate of salary paid and accrued
to the Executive in the most recent month in which he was paid
prior to the determination of his disability plus one-
twenty-fourth (1/24) of the greater of (A) the previous three
years' annual average total incentive compensation award earned
under the Incentive Plan and (B) the target level of incentive
compensation under the Incentive Plan for the year in which such
disability takes place, in each case, reduced by the amount of
monthly payments made under any long-term disability insurance or
plan of the Company, if any. Such semi-monthly payments shall
continue for the number of months remaining in the term of the
agreement following the date of his disability. In addition, if
the Executive becomes disabled and the Executive has twenty (20)
years or more of service at the time of disability, the Company
will continue to provide the same medical, dental and life
insurance benefits as provided to other active employees until
such time as the Executive elects to retire under the provisions
of the Pension Plan. Disability for purposes of this section
shall have the same meaning as provided under any long-term
disability policy of the Company which covers the Executive, or,
if none, as defined in the EnergyNorth, Inc. Retirement Plan for
Salaried Employees.
(ii) Prior to a determination of disability as provided
in Subsection (i) of this Section 7(d), if the Executive fails to
perform under this contract due to mental or physical illness,
the period of
such failure to perform prior to such determination of
disability but subsequent to any accrued sick days, vacation
days and reasonable leaves of absence shall be considered paid
leave, and the Company shall continue to make salary payments to
the Executive for the duration of such paid ]eave. Any period
during which the Executive is receiving benefits under any
long-term disability plan of the Company shall be considered
unpaid leave.
(iii) The Company and the Executive acknowledge and
agree that any termination pursuant to Section 7(d) shall not be
deemed a termination for Cause hereunder.
(h) Notice of Termination. Any termination by the Company
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(other than a termination for Cause pursuant to Section 7(a)),
shall be communicated by Notice of Termination to the other party
hereto given in accordance with Section 15. For purposes of
this Agreement, a "Notice of Termination" means a written notice
which
(i) indicates the specific termination provision in
this Agreement relied upon,
(ii) sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the
Executive's employment under the provision so indicated, and
(iii) if the Date of Termination (as defined below) is
other than the notice, specifies the termination date (which date
shall be not more than 15 days after the giving of such notice).
(i) Date of Termination. "Date of Termination" means
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(i) if the Executive's employment is terminated by the
Company for Cause, the For Cause Termination Date as specified in
the Notice provided pursuant to Section 7(a),
(ii) if the Executive's employment is terminated by the
Company other than for Cause, death or disability pursuant to
Section 7(d), the Date of Termination shall be the date on which
the Company notifies the Executive of such termination, and
(iii) if the Executive's employment is terminated by
reason of death or disability pursuant of Section 7(d), the Date
of Termination shall be the date of death of the Executive or the
date the Executive is determined to be incapable of performance
in accordance with Section 7(d) of this Agreement, as the case
may be.
(j) Nothing under this Agreement shall affect the
Executive's right to receive payments under his Deferred
Compensation Agreement.
4. Executive's Obligations.
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(a) Non-Competition.
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(i) Except as provided in Section 8(a)(i), while
receiving payments from the Company under this Agreement and for
a period of twelve months thereafter, the Executive will not
directly or indirectly, own, manage, operate, control or
participate in the ownership, management, operation or control
of, or be connected as an officer, employee, partner, director or
otherwise with, or have any financial interest in, or aid or
assist anyone else in the conduct of, any business (other than
the businesses of the Company) which is in direct competition
with the business conducted by the Company or any of its
subsidiaries, in any geographic area where such business is being
conducted during such period. Nothing in this Section 8,
however, shall restrict the right of the Executive to own,
whether for himself or as a fiduciary, not more than 1% of the
equity securities of a company any of the securities of which are
registered under Sections 11(b) or 11(g) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act").
(ii) Notwithstanding anything contained herein to the
contrary, the Executive shall not be bound by the non-competition
covenant provided in Section 8(a)(ii) in the event that,
following a Change of Control (as defined in Section 4 of the
MCA), either: (i) the Executive is terminated without Cause
pursuant to Section 5(a) of the MCA or (ii) the Executive
terminates his employment for Good Reason pursuant to Section
5(b) of the MCA.
(b) Non-Disclosure. During the term of this Agreement and
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thereafter, the Executive shall not, without the written consent
of the Board or a person authorized thereby, disclose or use
(except in the course of his employment hereunder and in
furtherance of the business of the Company or any subsidiaries or
affiliates thereof) any confidential information or proprietary
data of the Company or any of its subsidiaries or affiliates
thereof, including, without limitation, customer lists, cost
information or pricing information, except where such
confidential information or proprietary data becomes generally
known at the time of disclosure (other than as a result of the
Executive's wrongful disclosure) or where the Executive is
required by law to so disclose.
(c) Solicitation for Employment. While he is receiving
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payments from the Company under this Agreement or under the MCA,
and for a period of six months thereafter, the Executive will
not, directly or indirectly, employ, solicit for employment, or
advise or recommend to any other person that they employ or
solicit for employment, any person employed at the time by the
Company or any of its subsidiaries for the purpose of competing
with the Company in such manner as is described in Subsection (a)
of this Section 8.
5. Successor.
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6. The Company shall require any successor (whether direct
or indirect, by purchase, merger, consolidation or otherwise) to
all or substantially all of the business and/or assets of the
Company to assume expressly and agree to perform this Agreement
in the same manner and to the same extent that the Company would
be required to perform it if no successor had taken place. As
used in this Agreement, "Company" shall mean the company as
hereinbefore defined and any successor to its business and/or
assets as aforesaid which assumes and agrees to perform this
Agreement by operation of law, or otherwise.
7. Entire Agreement.
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8. This Agreement contains the entire understanding of the
Company and the Executive with respect to the subject matter
hereof. This Agreement shall supersede the agreement between the
Company and the Executive dated as of December 1, 1995 (the
"Prior Agreement") in all respects, unless this Agreement is held
invalid or unenforceable by a court of competent jurisdiction, in
which case the Prior Agreement shall remain, and shall be deemed
to have remained at all times, in full force and effect.
9. Arbitration.
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10. Any dispute or controversy between the parties relating
to this Agreement shall be settled by binding arbitration in the
City of Manchester, State of New Hampshire, pursuant to the
governing rules of the American Arbitration Association and shall
be subject to the provisions of New
Hampshire Revised Statutes Annotated Chapter 542. Judgment upon
the award may be entered in any court of competent jurisdiction.
11. Assignability.
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This Agreement is binding on and is for the benefit of
the parties hereto and their respective successors, heirs,
executors, administrators and other legal representatives.
Neither this Agreement nor any right or obligation hereunder may
be assigned by the Company or by the Executive without the other
party's prior written consent.
13. Withholding.
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14. The Company may withhold from any amounts payable under
this Agreement such Federal, state or local taxes as shall be
permitted to be withheld pursuant to any applicable law or
regulation. The Company may withhold such other amounts as may
be permitted by law.
15. Amendment; Waiver.
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This Agreement may be amended only by an instrument in
writing signed by the parties hereto, and any provision hereof
may be waived only by an instrument in writing signed by the
party or parties against whom or which enforcement of such waiver
is sought. The failure of either party hereto at any time to
require the performance by the other party hereto of any
provision hereof shall in no way affect the full right to require
such performance at any time thereafter, nor shall the waiver by
either party hereto of a breach of any provision hereof be taken
or held to be a waiver of any succeeding breach of such provision
or a waiver of the provision itself or a waiver of any other
provision of this Agreement.
1. Notices.
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All notices and other communications hereunder shall be
in writing and shall be given by hand delivery to the other party
or by registered or certified mail, return receipt requested,
postage prepaid, addressed as follows:
If to the Executive:
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Xxxxxx X. Xxxxxxxx
00 Xxxxxxx Xxxx
Xxxxxxx, XX 00000
If to the Company:
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Vice President of Human Resources
EnergyNorth, Inc.
0000 Xxx Xxxxxx
X.X. Xxx 000
Xxxxxxxxxx, XX 00000
Copy:
Xxxxxxx Xxxxxxx, Esquire
McLane, Graf, Xxxxxxxxx & Middleton
000 Xxx Xxxxxx
X.X. Xxx 000
Xxxxxxxxxx, XX 00000
or to such other address as either party shall have furnished to
the other in writing in accordance herewith. Notice and
communications shall be effective when actually received by the
addressee.
1. Validity.
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2. The invalidity or unenforceability of any provision or
provisions of this Agreement shall not affect the validity or
enforceability of any other provision of this Agreement, which
shall remain in full force and effect, nor shall the invalidity
or unenforceability of a portion of any provision of this
Agreement affect the validity or enforceability of the balance of
such provision. If any provision of this Agreement, or portion
thereof is so broad, in scope or duration, as to be
unenforceable, such provision or portion thereof shall be
interpreted to be only so broad as is enforceable.
3. Beneficiary.
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The Executive hereby designates as his beneficiary
under this Agreement Xxxxxxxxx X. Xxxxxxxx, provided that the
Executive may change his beneficiary, or provide for alternate
beneficiaries, at any time by notifying the Company in writing of
such change, and no consent shall be required from the
beneficiary or from the Company.
1. Independent Covenants.
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The obligations of the Executive set forth in paragraph
8 represent independent covenants by which the Executive is and
will remain bound notwithstanding any breach by the Company, and
shall survive the termination of this Agreement.
1. Applicable Law.
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2. This Agreement shall be governed by and construed in
accordance with the substantive internal law and not the conflict
of law provisions of the State of New Hampshire.
3. IN WITNESS WHEREOF, the parties hereto have duly executed
this Agreement as of the date first mentioned above.
ENERGYNORTH, INC.
BY:
XXXXXX X. XXXXX
Chairman - Board of Directors
XXXXXX X. XXXXXXXX
