EXHIBIT 10(a)
CONTINUITY AGREEMENT
This Agreement (the "Agreement") is dated as of May 7, 1999 by and
between AQUARION COMPANY, a Delaware corporation (the "Company"), and Xxxxxxx X.
Xxxxxxx (the "Executive").
WHEREAS, the Company's Board of Directors considers the continued
services of key executives of the Company to be in the best interests of the
Company and its stockholders; and
WHEREAS, the Company's Board of Directors desires to assure, and has
determined that it is appropriate and in the best interests of the Company and
its stockholders to reinforce and encourage the continued attention and
dedication of key executives of the Company to their duties of employment
without personal distraction or conflict of interest in circumstances which
could arise from the occurrence of a change in control of the Company; and
WHEREAS, the Company's Board of Directors has authorized the Company
to enter into continuity agreements with those key executives of the Company and
any of its respective subsidiaries (all of such entities, with the Company
hereinafter referred to as an "Employer"), such agreements to set forth the
severance compensation which the Company agrees under certain circumstances to
pay such executives; and
WHEREAS, the Executive is a key executive of an Employer and has been
designated by the Committee as an executive to be offered such a continuity
compensation agreement with the Company.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements contained herein and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
Company and the Executive agree as follows:
1. Term. This Agreement shall become effective on the date hereof
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and remain in effect until the third anniversary thereof; provided, however,
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that, thereafter, this Agreement shall automatically renew on each successive
anniversary, unless an Employer provides the Executive, in writing, at least 180
days prior to the renewal date, that this Agreement shall not be renewed.
Notwithstanding the foregoing, in the event that a Change in Control occurs at
any time prior to the termination of this Agreement in accordance with the
preceding sentence, this Agreement shall not terminate until the second
anniversary of the Change in Control.
2. Change in Control. No compensation or other benefit pursuant to
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Section 4 hereof shall be payable under this Agreement unless and until either
(i) a Change in Control of the Company (as hereinafter defined) shall have
occurred while the Executive is an employee of an Employer and the Executive's
employment by an Employer thereafter shall have terminated in accordance with
Section 3 hereof or (ii) the Executive's employment by the Company shall have
terminated in accordance with Section 3(a)(ii) hereof prior to the occurrence of
the Change in Control. For purposes of this Agreement, a "Change in Control"
shall be deemed to have occurred when:
(a) any "person" as defined in Section 3(a)(9) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and as used in
Section 13(d) and 14(d) thereof, including a "group" as defined in Section
13(d) of the Exchange Act but excluding the Company and any subsidiary and
any employee benefit plan sponsored or maintained by the Company or any
subsidiary (including any trustee of such plan acting as trustee), directly
or indirectly, becomes the "beneficial owner" (as defined in Rule 13d-3
under the Exchange Act), of securities of the Company representing 20% or
more of the combined voting power of the Company's then outstanding
securities (other than indirectly as a result of the Company's redemption
of its securities); or
(b) the consummation of any merger or other business combination of
the Company, sale of 50% or more of the Company's assets, liquidation or
dissolution of the Company or combination of the foregoing transactions
(the "Transactions") other than a Transaction immediately following which
the shareholders of the Company and any trustee or fiduciary of any Company
employee benefit plan immediately prior to the Transaction own at least 60%
of the voting power, directly or indirectly, of (A) the surviving
corporation in any such merger or other business combination; (B) the
purchaser of or successor to the Company's assets; (C) both the surviving
corporation and the purchaser in the event of any combination of
Transactions; or (D) the parent company owning 100% of such surviving
corporation, purchaser or both the surviving corporation and the purchaser,
as the case may be; or
(c) within any twenty-four month period, the persons who were
directors immediately before the beginning of such period (the "Incumbent
Directors") shall cease (for any reason other than death) to constitute at
least a majority of the Board or the board of directors of a successor to
the Company. For this purpose, any director who was not a director at the
beginning of such period shall be deemed to be an Incumbent Director if
such director was elected to the Board by, or on the recommendation of or
with the approval of, at least two-thirds of the directors who then
qualified as Incumbent Directors (so long as such director was not
nominated by a person who commenced or threatened to commence an election
contest or proxy solicitation by or on behalf of a Person (other than the
Board) or who has entered into an agreement to effect a Change in Control
or expressed an intention to cause such a Change in Control).
3. Termination of Employment; Definitions.
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(a) Termination without Cause by the Company or for Good Reason by
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the Executive. (i) The Executive shall be entitled to the compensation
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provided for in Section 4 hereof, if within two years after a Change in
Control, the Executive's employment by an Employer shall be terminated (A)
by an Employer for any reason other than (I) the Executive's Disability or
Retirement, (II) the Executive's death or (III) for Cause, or (B) by the
Executive with Good Reason (all terms are hereinafter defined).
(ii) In addition, the Executive shall be entitled to the compensation
provided for in Section 4 hereof if, (A) in the event that an agreement is
signed which, if consummated, would result in a Change of Control and the
Executive is terminated without Cause by the Company or terminates
employment with Good Reason prior to the
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Change in Control, (B) such termination is at the direction of the acquiror
or merger partner or otherwise in connection with the anticipated Change in
Control, and (C) such Change in Control actually occurs.
(b) Disability. For purposes of this Agreement, "Disability" shall
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mean the Executive's absence from the full-time performance of the Executive's
duties (as such duties existed immediately prior to such absence) for 180
consecutive business days, when the Executive is disabled as a result of
incapacity due to physical or mental illness.
(c) Retirement. For purposes of this Agreement, "Retirement" shall
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mean the Executive's voluntary termination of employment pursuant to late,
normal or early retirement under a pension plan sponsored by an Employer, as
defined in such plan, but only if such retirement occurs prior to a termination
by an Employer without Cause or by the Executive for Good Reason.
(d) Cause. For purposes of this Agreement, "Cause" shall mean:
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(i) the willful and continued failure of the Executive to
perform substantially all of his or her duties with an Employer (other than
any such failure resulting from incapacity due to physical or mental
illness), after a written demand for substantial performance is delivered
to such Executive by the Board of Directors (the "Board") of the Company
which specifically identifies the manner in which the Board believes that
the Executive has not substantially performed his or her duties,
(ii) the willful engaging by the Executive in gross misconduct
which is materially and demonstrably injurious to the Company or any
Employer; or
(iii) the conviction of, or plea of guilty or nolo contendere
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to, a felony.
Termination of the Executive for Cause shall be made by delivery to the
Executive of a copy of a resolution duly adopted by the affirmative vote of not
less than a three-fourths majority of the non-employee Directors of the Company
or of the ultimate parent of the entity which caused the Change in Control (if
the Company has become a subsidiary) at a meeting of such Directors called and
held for such purpose, after 30 days prior written notice to the Executive
specifying the basis for such termination and the particulars thereof and a
reasonable opportunity for the Executive to cure or otherwise resolve the
behavior in question prior to such meeting, finding that in the reasonable
judgment of such Directors, the conduct or event set forth in any of clauses (i)
through (iii) above has occurred and that such occurrence warrants the
Executive's termination.
(e) Good Reason. For purposes of this Agreement, "Good Reason" shall
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mean the occurrence, within the Term of this Agreement, of any of the following
without the Executive's express written consent:
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(iii) any material and adverse diminution in the Executive's
duties or responsibilities with the Company (or any affiliate thereof) from
those in effect immediately prior to the Change in Control; provided,
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however, that no such diminution shall be deemed to exist solely because of
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changes in Executive's duties, responsibilities or titles as a consequence
of the Company ceasing to be a company with publicly-traded securities or
becoming a wholly-owned subsidiary of another company;
(iv) any reduction in the Executive's annual base salary or
cash bonus percentage target from the annual base salary or cash bonus
percentage target in effect immediately prior to the Change in Control;
(v) any requirement that Executive be based at a location more
than 35 miles from the location at which the Executive was based
immediately prior to the Change in Control (or a substantial increase in
the amount of travel Executive is required to do because of a relocation of
the executive offices);
(vi) any failure by the Company to obtain from any successor to
the Company an agreement reasonably satisfactory to the Executive to assume
and perform this Agreement, as contemplated by Section 10(a) hereof; and
(vii) during the thirty-day period immediately following the first
anniversary of the Change in Control, the voluntary termination of employment by
the Executive for any reason or no reason at all.
Notwithstanding the foregoing, in the event Executive provides the Company with
a Notice of Termination (as defined below) referencing this Section 3(e) (with
the exception of Section 3(e)(vii)), the Company shall have 30 days thereafter
in which to cure or resolve the behavior otherwise constituting Good Reason.
Any good faith determination by Executive that Good Reason exists shall be
presumed correct and shall be binding upon the Company.
(f) Notice of Termination. Any purported termination of the
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Executive's employment (other than on account of Executive's death) with an
Employer shall be communicated by a Notice of Termination to the Executive, if
such termination is by an Employer, or to an Employer, if such termination is by
the Executive. For purposes of this Agreement, "Notice of Termination" shall
mean a written notice which shall indicate the specific termination provision in
this Agreement relied upon and shall set forth in reasonable detail the facts
and circumstances claimed to provide a basis for termination of the Executive's
employment under the provisions so indicated; provided, however, that in
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connection with a termination for Good Reason under Section 3(e)(vii), no
details shall be necessary other than reference to such Section. For purposes
of this Agreement, no purported termination of Executive's employment with an
Employer shall be effective without such a Notice of Termination having been
given.
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4. Compensation Upon Termination After a Change in Control.
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Subject to Section 9 hereof, if within two years of a Change in
Control, the Executive's employment by an Employer shall be terminated in
accordance with Section 3(a) (the "Termination"), the Executive shall be
entitled to the following payments and benefits:
(a) Severance. The Company shall pay or cause to be paid to the
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Executive a cash severance amount equal to (i) three times the sum of (A)
the Executive's annual base salary on the date of the Change in Control
(or, if higher, the annual base salary in effect immediately prior to the
giving of the Notice of Termination, and (B) the average of the actual
bonuses earned by the Executive in respect of the two years prior to the
year in which the Change in Control occurs under the Company's Executive
Incentive Award Program, plus (ii) in lieu of the continuation of any of
the Executive's perquisites as provided under the Executive's employment
agreement, a cash payment equal to 12 percent of the Executive's annual
base salary as in effect on the date of the Change in Control for each of
the three years following the Change in Control. This cash severance
amount shall be payable in equal monthly installments or, at the Company's
election, in a lump sum calculated without any discount.
(b) Additional Payments and Benefits. The Executive shall also be
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entitled to:
(i) a lump sum cash payment equal to the sum of (A) the
Executive's accrued but unpaid annual base salary through the date of
Termination, (B) the unpaid portion, if any, of bonuses previously
earned by the Executive pursuant to the Company's Executive Incentive
Award Program, plus the pro rata portion of the bonus to be paid for
the year in which the date of Termination occurs (calculated through
the date of Termination), and (C) an amount, if any, equal to
compensation previously deferred (excluding any qualified plan
deferral) and any accrued vacation pay, in each case, in full
satisfaction of Executive's rights thereto.
(ii) a lump sum cash payment equal to the aggregate sum of
(A) additional pension contributions in an amount equal to the
Company's contributions under the Company's Thrift and Savings Program
and Employee Stock Ownership Plan (or such other qualified and
nonqualified defined contribution pension plans as then in effect) for
the three-year period following the date of Termination (the
"Separation Period") (based on assumed rates of Executive's
contributions at the level of participation in effect as of the last
date Executive was permitted to participate); and (B) the difference
between the present value of the annual benefit the Executive would be
entitled to receive under the Retirement Program (if the Executive had
continued employment through the Separation Period) and the annual
benefit expressed as a life annuity under the Retirement Program
accrued thereunder as of the date of termination of employment, after
giving effect to three years of continued credit for age and
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services purposes, as if he had been paid at the rate used to
calculate the payments under Section 4(a); provided, however, that the
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Executive shall receive the present value of the Executive's annual
benefit that he/she would have received if, at the time of termination
of employment, the Executive would have been eligible for a full,
unreduced life annuity under the Retirement Plan, after including in
the calculation thereof years of service and compensation credit
through age 62..
(iii) continued medical, dental, vision, and life insurance
coverage (excluding accident, death, and disability insurance) for the
Executive and the Executive's eligible dependents or, to the extent
such coverage is not commercially available, such other arrangements
reasonably acceptable to the Executive, on the same basis as in effect
prior to the Change in Control or the Executive's Termination,
whichever is deemed to provide for more substantial benefits, for a
period ending on the earlier of (A) the end of the Separation Period
or (B) the commencement of comparable coverage by the Executive with a
subsequent employer;
(iv) unless it would adversely affect the Company's
ability to use pooling of interest accounting in a Change in Control
transaction in which such accounting is intended to be used, immediate
100% vesting of all outstanding stock options, stock appreciation
rights and restricted stock granted or issued by any Employer to the
extent not previously vested on or following the Change of Control;
and
(v) all other accrued or vested benefits in accordance
with the terms of the applicable plan (with an offset for any amounts
paid under Section 4(b)(i)(C), above).
All lump sum payments under this Section 4 shall be paid within 10 business
days after Executive's date of Termination. Present value for purposes of
subsection (ii) above shall be calculated using a discount factor equal to
one percentage point below the prime rate as published in The Wall Street
Journal as of the date on which termination of employment occurred and
using the actuarial factors set forth in the Retirement Program.
(c) Outplacement. If so requested by the Executive, outplacement
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services shall be provided by a professional outplacement provider selected
by Executive; provided, however, that such outplacement services shall be
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provided the Executive at a cost to the Company of not more than ten (10)
percent of such Executive's annual base salary.
(d) Withholding. Payments and benefits provided pursuant to this
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Section 4 shall be subject to any applicable payroll and other taxes
required to be withheld.
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5. Compensation Upon Termination for Death, Disability or Retirement.
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If an Executive's employment is terminated by reason of Death,
Disability or Retirement prior to any other termination, Executive will receive:
(a) the sum of (i) Executive's accrued but unpaid salary through the
date of Termination, (ii) the pro rata portion of the Executive's target
bonus for the year of Executive's Death or Disability (calculated through
the date of Termination), and (iii) an amount equal to any compensation
previously deferred an any accrued vacation pay; and
(b) other accrued or vested benefits in accordance with the terms of
the applicable plan (with an offset for any amounts paid under item
(a)(iii), above.
6. Excess Parachute Excise Tax Payments.
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(a) (i) If it is determined (as hereafter provided) that any payment
or distribution by the Company or any Employer to or for the benefit of the
Executive, whether paid or payable or distributed or distributable pursuant to
the terms of this Agreement or otherwise pursuant to or by reason of any other
agreement, policy, plan, program or arrangement, including without limitation
any stock option, stock appreciation right or similar right, or the lapse or
termination of any restriction on or the vesting or exercisability of any of the
foregoing (a "Payment"), would be subject to the excise tax imposed by Section
4999 of the Code (or any successor provision thereto) by reason of being
"contingent on a change in ownership or control" of the Company, within the
meaning of Section 280G of the Code (or any successor provision thereto) or to
any similar tax imposed by state or local law, or any interest or penalties with
respect to such excise tax (such tax or taxes, together with any such interest
and penalties, are hereafter collectively referred to as the "Excise Tax"), then
the Executive shall be entitled to receive an additional payment or payments (a
"Gross-Up Payment") in an amount such that, after payment by the Executive of
all taxes (including any interest or penalties imposed with respect to such
taxes), including any Excise Tax, imposed upon the Gross-Up Payment, the
Executive retains an amount of the Gross-Up Payment equal to the Excise Tax
imposed upon the Payments.
(ii) Subject to the provisions of Section 6(a)(i) hereof, all
determinations required to be made under this Section 6, including whether an
Excise Tax is payable by the Executive and the amount of such Excise Tax and
whether a Gross-Up Payment is required and the amount of such Gross-Up Payment,
shall be made by the nationally recognized firm of certified public accountants
(the "Accounting Firm") used by the Company prior to the Change in Control (or,
if such Accounting Firm declines to serve, the Accounting Firm shall be a
nationally recognized firm of certified public accountants selected by the
Executive). The Accounting Firm shall be directed by the Company or the
Executive to submit its preliminary determination and detailed supporting
calculations to both the Company and the Executive within 15 calendar days after
the Termination Date, if applicable, and any other such time or times as may be
requested by the Company or the Executive. If the Accounting Firm determines
that any Excise Tax is payable by the Executive, the Company shall pay the
required Gross-Up
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Payment to, or for the benefit of, the Executive within five business days after
receipt of such determination and calculations. If the Accounting Firm
determines that no Excise Tax is payable by the Executive, it shall, at the same
time as it makes such determination, furnish the Executive with an opinion that
he has substantial authority not to report any Excise Tax on his/her federal,
state, local income or other tax return. Any determination by the Accounting
Firm as to the amount of the Gross-Up Payment shall be binding upon the Company
and the Executive absent a contrary determination by the Internal Revenue
Services or a court of competent jurisdiction; provided, however, that no such
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determination shall eliminate or reduce the Company's obligation to provide any
Gross-Up Payment that shall be due as a result of such contrary determination.
As a result of the uncertainty in the application of Section 4999 of the Code
(or any successor provision thereto) and the possibility of similar uncertainty
regarding state or local tax law at the time of any determination by the
Accounting Firm hereunder, it is possible that Gross-Up Payments that will not
have been made by the Company should have been made (an "Underpayment"),
consistent with the calculations required to be made hereunder. In the event
that the Company exhausts or fails to pursue its remedies pursuant to Section
6(a) hereof and the Executive thereafter is required to make a payment of any
Excise Tax, the Executive shall direct the Accounting Firm to determine the
amount of the Underpayment that has occurred and to submit its determination and
detailed supporting calculations to both the Company and the Executive as
promptly as possible. Any such Underpayment shall be promptly paid by the
Company to, or for the benefit of, the Executive within five business days after
receipt of such determination and calculations.
(iii) The Company and the Executive shall each provide the Accounting
Firm access to and copies of any books, records and documents in the possession
of the Company or the Executive, as the case may be, reasonably requested by the
Accounting Firm, and otherwise cooperate with the Accounting Firm in connection
with the preparation and issuance of the determination contemplated by Section
6(a) hereof.
(iv) The federal, state and local income or other tax returns filed
by the Executive (or any filing made by a consolidated tax group which includes
the Company) shall be prepared and filed on a consistent basis with the
determination of the Accounting Firm with respect to the Excise Tax payable by
the Executive. The Executive shall make proper payment of the amount of any
Excise Tax, and at the request of the Company, provide to the Company true and
correct copies (with any amendments) of his/her federal income tax return as
filed with the Internal Revenue Service and corresponding state and local tax
returns, if relevant, as filed with the applicable taxing authority, and such
other documents reasonably requested by the Company, evidencing such payment.
If prior to the filing of the Executive's federal income tax return, or
corresponding state or local tax return, if relevant, the Accounting Firm
determines that the amount of the Gross-Up Payment should be reduced, the
Executive shall within five business days pay to the Company the amount of such
reduction.
(v) The fees and expenses of the Accounting Firm for its services
in connection with the determinations and calculations contemplated by Sections
6(a)(ii) and (iv) hereof shall be borne by the Company. If such fees and
expenses are initially advanced by the
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Executive, the Company shall reimburse the Executive the full amount of such
fees and expenses within five business days after receipt from the Executive of
a statement therefor and reasonable evidence of his/her payment thereof.
(b) In the event that the Internal Revenue Service claims that any
payment or benefit received under this Agreement constitutes an "excess
parachute payment," within the meaning of Section 280G(b)(1) of the Code, the
Executive shall notify the Company in writing of such claim. Such notification
shall be given as soon as practicable but no later than 10 business days after
the Executive is informed in writing of such claim and shall apprise the Company
of the nature of such claim and the date on which such claim is requested to be
paid. The Executive shall not pay such claim prior to the expiration of the 30
day period following the date on which the Executive gives such notice to the
Company (or such shorter period ending on the date that any payment of taxes
with respect to such claim is due). If the Company notifies the Executive in
writing prior to the expiration of such period that it desires to contest such
claim, the Executive shall (i) give the Company any information reasonably
requested by the Company relating to such claim; (ii) take such action in
connection with contesting such claim as the Company shall reasonably request in
writing from time to time, including without limitation, accepting legal
representation with respect to such claim by an attorney reasonably selected by
the Company and reasonably satisfactory to the Executive; (iii) cooperate with
the Company in good faith in order to effectively contest such claim; and (iv)
permit the Company to participate in any proceedings relating to such claim;
provided, however, that the Company shall bear and pay directly all costs and
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expenses (including, but not limited to, additional interest and penalties and
related legal, consulting or other similar fees) incurred in connection with
such contest and shall indemnify and hold the Executive harmless, on an after-
tax basis, for and against any Excise Tax or other tax (including interest and
penalties with respect thereto) imposed as a result of such representation and
payment of costs and expenses.
(c) The Company shall control all proceedings taken in connection
with such contest and, at its sole option, may pursue or forgo any and all
administrative appeals, proceedings, hearings and conferences with the taxing
authority in respect of such claim and may, at its sole option, either direct
the Executive to pay the tax claimed and xxx for a refund or contest the claim
in any permissible manner, and the Executive agrees to prosecute such contest to
a determination before any administrative tribunal, in a court of initial
jurisdiction and in one or more appellate courts, as the Company shall
determine; provided, however, that if the Company directs the Executive to pay
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such claim and xxx for a refund, the Company shall advance the amount of such
payment to the Executive on an interest-free basis, and shall indemnify and hold
the Executive harmless, on an after-tax basis, from any Excise Tax or other tax
(including interest and penalties with respect thereto) imposed with respect to
such advance or with respect to any imputed income with respect to such advance;
and provided, further, that if the Executive is required to extend the statute
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of limitations to enable the Company to contest such claim, the Executive may
limit this extension solely to such contested amount. The Company's control of
the contest shall be limited to issues with respect to which a corporate
deduction would be disallowed pursuant to Section 280G of the Code and the
Executive shall be entitled to settle or contest, as the case may be, any other
issue raised by the Internal Revenue
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Service or any other taxing authority. In addition, no position may be taken nor
any final resolution be agreed to by the Company without the Executive's consent
if such position or resolution could reasonably be expected to adversely affect
the Executive (including any other tax position of the Executive unrelated to
matters covered hereby).
(d) If, after the receipt by the Executive of an amount advanced by
the Company in connection with the contest of the Excise Tax claim, the
Executive becomes entitled to receive any refund with respect to such claim, the
Executive shall promptly pay to the Company the amount of such refund (together
with any interest paid or credited thereon after taxes applicable thereto);
provided, however, if the amount of that refund exceeds the amount advanced by
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the Company or it is otherwise determined for any reason that additional amounts
could be paid to the Named Executive without incurring any Excise Tax, any such
amount will be promptly paid by the Company to the named Executive. If, after
the receipt by the Executive of an amount advanced by the Company in connection
with an Excise Tax claim, a determination is made that the Executive shall not
be entitled to any refund with respect to such claim and the Company does not
notify the Executive in writing of its intent to contest the denial of such
refund prior to the expiration of 30 days after such determination, such advance
shall be forgiven and shall not be required to be repaid and shall be deemed to
be in consideration for services rendered after the date of the Termination.
7. Expenses. In addition to all other amounts payable to the
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Executive under this Agreement, the Company shall pay or reimburse the Executive
for legal fees (including without limitation, any and all court costs and
attorneys' fees and expenses) incurred by the Executive in connection with or as
a result of any claim, action or proceeding brought by the Company or the
Executive with respect to or arising out of this Agreement or any provision
hereof; provided, however, that in the case of an action brought by the
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Executive, the Company shall have no obligation for any such legal fees, if the
Company is successful in establishing with the court that the Executive's action
was frivolous or otherwise without any reasonable legal or factual basis.
8. Obligations Absolute;; Non-Exclusivity of Rights; Joint Several
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Liability.
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(a) The obligations of the Company to make the payment to the
Executive, and to make the arrangements, provided for herein shall be absolute
and unconditional and shall not be reduced by any circumstances, including
without limitation any set-off, counterclaim, recoupment, defense or other right
which the Company may have against the Executive or any third party at any time.
(b) Nothing in this Agreement shall prevent or limit the Executive's
continuing or future participation in any benefit, bonus, incentive or other
plan or program provided by the Company or any other Employer and for which the
Executive may qualify, nor shall anything herein limit or reduce such rights as
the Executive may have under any agreements with the Company or any other
Employer.
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(c) Each entity included in the definition of "Employer" and any
successors or assigns shall be joint and severally liable with the Company under
this Agreement.
9. Not an Employment Agreement; Effect On Other Rights.
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(a) This Agreement is not, and nothing herein shall be deemed to
create, a contract of employment between the Executive and the Company. The
Company may terminate the employment of the Executive by the Company at any
time, subject to the terms of this Agreement and/or any employment agreement or
arrangement between the Company and the Executive that may then be in effect.
(b) With respect to the Executive's employment agreement as in effect
immediately prior to the Change in Control, nothing herein shall have any effect
on the Executive's rights thereunder; provided, however, that in the event of
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the Executive's termination of employment in accordance with Section 3 hereof,
this Agreement shall govern solely for the purpose of providing the terms of all
payments and additional benefits to which the Executive is entitled upon such
termination and any payments or benefit provided thereunder shall reduce the
corresponding type of payments or benefits hereunder. Notwithstanding the
foregoing, in the event that the Executive's employment is terminated prior to
the occurrence of a Change in Control under the circumstances provided for in
Section 3(a)(ii) and such circumstances also entitle Executive to payments and
benefits under any other employment or other agreement as in effect prior to the
Change in Control ("Other Agreement"), then, until the Change in Control occurs,
the Executive will receive the payments and benefits to which he/she is entitled
under such Other Agreement. Upon the occurrence of the Change in Control, the
Company will pay to the Executive in cash the amount to which he/she is entitled
to under this Agreement (reduced by the amounts already paid under the Other
Agreement) in respect of cash payments and shall provide or increase any other
noncash benefits to those provided for hereunder (after taking into Account
noncash benefits, if any, provided under such Other Agreement). Amounts which
are vested benefits or which the Executive is otherwise entitled to receive
under any plan or program of the Company or any other Employer shall be payable
in accordance with such plan or program, except as explicitly modified by this
Agreement.
10. Successors; Binding Agreement, Assignment.
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(a) The Company shall require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business of the Company, by agreement to expressly,
absolutely and unconditionally assume 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 such succession had taken place. Failure of the Company to obtain such
agreement prior to the effectiveness of any such succession shall be a material
breach of this Agreement and shall entitle the Executive to terminate the
Executive's employment with the Company or such successor for Good Reason
immediately prior to or at any time after such succession. As used in this
Agreement, "Company" shall mean (i) the Company as hereinbefore defined, and
(ii) any successor to all the stock of the Company or to all or substantially
all of the
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Company's business or assets which executes and delivers an agreement provided
for in this Section 10(a) or which otherwise becomes bound by all the terms and
provisions of this Agreement by operation of law, including any parent or
subsidiary of such a successor.
(b) This Agreement shall inure to the benefit of and be enforceable
by the Executive's personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees. If the Executive should
die while any amount would be payable to the Executive hereunder if the
Executive had continued to live, all such amounts, unless otherwise provided
herein, shall be paid in accordance with the terms of this Agreement to the
Executive's estate or designated beneficiary. Neither this Agreement nor any
right arising hereunder may be assigned or pledged by the Executive.
11. Notice. For purpose of this Agreement, notices and all other
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communications provided for in this Agreement or contemplated hereby shall be in
writing and shall be deemed to have been duly given when personally delivered,
delivered by a nationally recognized overnight delivery service or when mailed
United States certified or registered mail, return receipt requested, postage
prepaid, and addressed, in the case of the Company, to the Company at:
Aquarion Company
000 Xxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxxx 00000
Attention: Chief Executive Officer
and in the case of the Executive, to the Executive at the address set forth on
the execution page at the end hereof.
Either party may designate a different address by giving notice of change
of address in the manner provided above, except that notices of change of
address shall be effective only upon receipt.
12. Confidentiality. The Executive shall retain in confidence any
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and all confidential information concerning the Company and its respective
business which is now known or hereafter becomes known to the Executive, except
as otherwise required by law and except information (i) ascertainable or
obtained from public information, (ii) received by the Executive at any time
after the Executive's employment by the Company shall have terminated, from a
third party not employed by or otherwise affiliated with the Company or (iii)
which is or becomes known to the public by any means other than a breach of this
Section 12. Upon the Termination of employment, the Executive will not take or
keep any proprietary or confidential information or documentation belonging to
the Company.
13. Miscellaneous. No provision of this Agreement may be amended,
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altered, modified, waived or discharged unless such amendment, alteration,
modification, waiver or discharge is agreed to in writing signed by the
Executive and such officer of the Company as shall be specifically designated by
the Committee or by the Board of Directors of the Company.
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No waiver by either party, at any time, of any breach by the other party of, or
of compliance by the other party with, any condition or provision of this
Agreement to be performed or complied with by such other party shall be deemed a
waiver of any similar or dissimilar provision or condition of this Agreement or
any other breach of or failure to comply with the same condition or provision at
the same time or at any prior or subsequent time. No agreements or
representations, oral or otherwise, express or implied, with respect to the
subject matter hereof have been made by either party which are not expressly set
forth in this Agreement.
14. Severability. If any one or more of the provisions of this
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Agreement shall be held to be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions of this Agreement shall
not be affected thereby. To the extent permitted by applicable law, each party
hereto waives any provision of law which renders any provision of this Agreement
invalid, illegal or unenforceable in any respect.
15. Governing Law; Venue. The validity, interpretation, construction
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and performance of this Agreement shall be governed on a non-exclusive basis by
the laws of the State of Connecticut without giving effect to its conflict of
laws rules. For purposes of jurisdiction and venue, the Company and each
Employer hereby consents to jurisdiction and venue in any suit, action or
proceeding with respect to this Agreement in any court of competent jurisdiction
in the state in which Executive resides at the commencement of such suit, action
or proceeding and waives any objection, challenge or dispute as to such
jurisdiction or venue being proper.
16. Counterparts. This Agreement may be executed in two or more
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counterparts, each of which shall be an original and all of which shall be
deemed to constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
AQUARION COMPANY:
By: /s/ Xxxxx X. Xxxxxx
--------------------------------
Title: Executive VP & CFO
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EXECUTIVE:
Xxxxxxx X. Xxxxxxx
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Xxxxxxx X. Xxxxxxx
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Address
