EXHIBIT 10.6
EMPLOYMENT CONTINUATION AGREEMENT
THIS AGREEMENT between New Jersey Resources Corporation, a New Jersey
corporation (the "Company"), and <> (the "Executive"), dated as of this
____ day of __________, 200_.
WITNESSETH :
WHEREAS, the Company has employed the Executive in an officer position
with the Company or affiliate thereof and has determined that the Executive
holds an important position with same;
WHEREAS, the Company believes that, in the event it is confronted with a
situation that could result in a change in ownership or control of the Company,
continuity of management will be essential to its ability to evaluate and
respond to such situation in the best interests of shareholders;
WHEREAS, the Company understands that any such situation will present
significant concerns for the Executive with respect to his financial and job
security;
WHEREAS, the Company desires to assure itself of the Executive's services
during the period in which it is confronting such a situation, and to provide
the Executive certain financial assurances to enable the Executive to perform
the responsibilities of his position without undue distraction and to exercise
his judgment without bias due to his personal circumstances;
WHEREAS, to achieve these objectives, the Company and the Executive desire
to enter into an agreement providing the Company and the Executive with certain
rights and obligations upon the occurrence of a Change in Control or Potential
Change in Control (as defined in Section 2);
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is hereby agreed by and between the Company and the
Executive as follows:
1. Operation of Agreement.
(a) Effective Date. The effective date of this Agreement shall be
the date on which a Change in Control occurs (the "Effective Date"), provided
that, except as provided in Section 1(b), if the Executive is not employed by
the Company on the Effective Date, this Agreement shall be void and without
effect.
(b) Termination of Employment Following a Potential Change in
Control. Notwithstanding Section 1(a), if (i) the Executive's employment is
terminated by the Company Without Cause (as defined in Section 6(c)) after the
occurrence of a Potential Change in Control and prior to the occurrence of a
Change in Control and (ii) a Change in Control occurs within one year of such
termination, the Executive shall be deemed, solely for purposes of determining
his rights under this Agreement, to have remained employed until the date such
Change in Control occurs and to have been terminated by the Company Without
Cause immediately after this Agreement becomes effective.
2. Definitions.
(a) Change in Control. For the purposes of this Agreement, a "Change
in Control" shall be deemed to have occurred if:
(i) any Person (as defined below) has acquired, "beneficial
ownership" (within the meaning of Rule 13d-3, as promulgated under Section
13(d) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act")) of securities of the Company representing fifty (50%) percent or
more of the combined Voting Power (as defined below) of the Company's
securities;
(ii) within any 24-month period, the persons who were
directors of the Company 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 any successor to the Company, provided that any director who was not a
director at the beginning of such period shall be deemed to be an
Incumbent Director if such director (A) 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 either actually or by
prior operation of this Section 2(a)(ii) and (B) was not designated by a
person who has entered into an agreement with the Company to effect a
Corporate Event, as described in Section 2(a)(iii); or
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(iii) the stockholders of the Company approve a merger,
consolidation, share exchange, division, sale or other disposition of all
or substantially all of the assets of the Company (a "Corporate Event"),
as a result of which the shareholders of the Company immediately prior to
such Corporate Event shall not hold, directly or indirectly, immediately
following such Corporate Event a majority of the Voting Power of (x) in
the case of a merger or consolidation, the surviving or resulting
corporation, (y) in the case of a share exchange, the acquiring
corporation or (z) in the case of a division or a sale or other
disposition of assets, each surviving, resulting or acquiring corporation
which, immediately following the relevant Corporate Event, holds more than
10% of the consolidated assets of the Company immediately prior to such
Event.
(b) Potential Change in Control. For the purposes of this
Agreement, a "Potential Change in Control" shall be deemed to have occurred if:
(i) a Person commences a tender offer for securities
representing at least 20% of the Voting Power of the Company's securities;
(ii) the Company enters into an agreement the consummation of
which would constitute a Change in Control;
(iii) proxies for the election of directors of the Company are
solicited by anyone other than the Company; or
(iv) any other event occurs which is deemed to be a Potential
Change in Control by the Board.
(c) Person Defined. For purposes of this Section 2, "Person" shall
have the meaning ascribed to such term in Section 3(a)(9) of the Exchange Act,
as supplemented by Section 13(d)(3) of the Exchange Act; provided, however, that
Person shall not include (i) the Company or any subsidiary of the Company or
(ii) any employee benefit plan sponsored by the Company or any subsidiary of the
Company.
(d) Voting Power Defined. A specified percentage of "Voting Power"
of a company shall mean such number of the Voting Securities as shall enable the
holders thereof to cast such percentage of all the votes which could be cast in
an annual election of directors (without consideration of the rights of any
class of stock other than the common stock of the company to elect directors by
a separate class vote); and "Voting Securities" shall mean all securities of a
company entitling the holders thereof to vote in
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an annual election of directors (without consideration of the rights of any
class of stock other than the common stock of the company to elect directors by
a separate class vote).
3. Employment Period. Subject to Section 6 of this Agreement, the Company
agrees to continue the Executive in its employ, and the Executive agrees to
remain in the employ of the Company, for the period (the "Employment Period")
commencing on the Effective Date and ending on the third anniversary of the
Effective Date.
4. Position and Duties.
(a) No Reduction in Position. During the Employment Period, the
Executive's position (including titles), authority and responsibilities shall be
at least commensurate with those held, exercised and assigned immediately prior
to the Effective Date. It is understood that, for purposes of this Agreement,
such position, authority and responsibilities shall not be regarded as not
commensurate merely by virtue of the fact that a successor shall have acquired
all or substantially all of the business and/or assets of the Company as
contemplated by Section 12(b) of this Agreement. The Executive's services shall
be performed at the location where the Executive was employed immediately
preceding the Effective Date.
(b) Business Time. From and after the Effective Date, the Executive
agrees to devote substantially all of his attention during normal business hours
to the business and affairs of the Company, to the extent necessary to discharge
his responsibilities hereunder, except for (i) time spent in managing his
personal, financial and legal affairs, serving on corporate, civic or charitable
boards or committees or working for any charitable or civic organization, in
each case only if and to the extent not materially interfering with the
performance of such responsibilities, and (ii) periods of vacation and sick
leave to which he is entitled. It is expressly understood and agreed that the
Executive's continuing to serve on any boards and committees on which he is
serving or with which he is otherwise associated immediately preceding the
Effective Date shall be deemed not to interfere with the performance of the
Executive's services to the Company.
5. Compensation.
(a) Base Salary. During the Employment Period, the Executive shall
receive a base salary at a monthly rate at least equal to the monthly salary
paid to the Executive by the Company and any of its affiliated companies
immediately prior to the Effective Date. The base salary shall be reviewed at
least once each year after the Effective Date, and may be increased (but not
decreased) at any time and from time to
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time by action of the Board or any committee thereof or by any individual having
authority to take such action in accordance with the Company's regular
practices. The Executive's base salary, as it may be increased from time to
time, shall hereafter be referred to as "Base Salary". Neither the Base Salary
nor any increase in Base Salary after the Effective Date shall serve to limit or
reduce any other obligation of the Company hereunder.
(b) Annual Bonus. During the Employment Period, in addition to the
Base Salary, for each fiscal year of the Company ending during the Employment
Period, the Executive shall be afforded the opportunity to receive an annual
bonus on terms and conditions no less favorable to the Executive (taking into
account reasonable changes in the Company's goals and objectives) than the
annual bonus opportunity that had been made available to the Executive for the
fiscal year ended immediately prior to the Effective Date (the "Annual Bonus
Opportunity"). Any amount payable in respect of the Annual Bonus Opportunity
shall be paid as soon as practicable following the year for which the amount (or
prorated portion) is earned or awarded, but not later than 90 days after the
close of the calendar year for which the bonus is payable, unless electively
deferred by the Executive pursuant to any deferral programs or arrangements that
the Company may make available to the Executive.
(c) Long-term Incentive Compensation Programs. During the Employment
Period, the Executive shall participate in all long-term incentive compensation
programs ("LTICP") for key executives at a level that is commensurate with the
Executive's participation in such plans immediately prior to the Effective Date,
or, if more favorable to the Executive, at the level made available to the
Executive or other similarly situated officers at any time thereafter.
(d) Benefit Plans. During the Employment Period, the Executive (and,
to the extent applicable, his dependents) shall be entitled to participate in or
be covered under all pension, retirement, deferred compensation, savings,
medical, dental, health, disability, severance, group life, accidental death and
travel accident insurance plans and programs of the Company and its affiliated
companies at a level that is commensurate with the Executive's participation in
such plans immediately prior to the Effective Date, or, if more favorable to the
Executive, at the level made available to the Executive or other similarly
situated officers at any time thereafter.
(e) Expenses. During the Employment Period, the Executive shall be
entitled to receive prompt reimbursement for all reasonable expenses incurred by
the Executive in accordance with the policies and procedures of the Company as
in effect immediately prior to the Effective Date. Notwithstanding the
foregoing, the Company
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may apply the policies and procedures in effect after the Effective Date to the
Executive, if such policies and procedures are more favorable to the Executive
than those in effect immediately prior to the Effective Date.
(f) Vacation, Perquisites and Fringe Benefits. During the Employment
Period, the Executive shall be entitled to paid vacation, perquisites and fringe
benefits at a level that is commensurate with the paid vacation, perquisites and
fringe benefits available to the Executive immediately prior to the Effective
Date, or, if more favorable to the Executive, at the level made available from
time to time to the Executive or other similarly situated officers at any time
thereafter.
(g) Indemnification. The Company agrees that if the Executive is
made a party, or is threatened to be made a party, to any action, suit or
proceeding, whether civil, criminal, administrative or investigative (a
"Proceeding"), by reason of the fact that he is or was a director, officer or
employee of the Company, the Executive shall be indemnified and held harmless by
the Company to the fullest extent legally permitted or authorized by agreement,
or by the Company's certificate of incorporation or bylaws or resolutions of the
Board or, if greater, by the laws of the State of New Jersey, against all cost,
expense, liability and loss (including, without limitation, attorney's fees,
judgments, fines, ERISA excise taxes or penalties and amounts paid or to be paid
in settlement) reasonably incurred or suffered by the Executive in connection
therewith. The Company agrees to continue and maintain a directors' and
officers' liability insurance policy covering Executive to the extent the
Company provides such coverage for its other executive officers.
(h) Office and Support Staff. The Executive shall be entitled to an
office with furnishings and other appointments, and to secretarial and other
assistance, at a level that is at least commensurate with that provided to the
Executive immediately prior to the Effective Date.
6. Termination.
(a) Death, Disability or Retirement. Subject to the provisions of
Section 1 hereof, this Agreement shall terminate automatically upon the
Executive's death, termination due to "Disability" (as defined below) or
voluntary retirement under any of the Company's retirement plans as in effect
from time to time. For purposes of this Agreement, Disability shall mean the
Executive has been incapable of substantially fulfilling the positions, duties,
responsibilities and obligations set forth in this Agreement because of
physical, mental or emotional incapacity resulting from injury, sickness or
disease for a period of at least six consecutive months. The Company and the
Executive
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shall agree on the identity of a physician to resolve any question as to the
Executive's disability. If the Company and the Executive cannot agree on the
physician to make such determination, then the Company and the Executive shall
each select a physician and those physicians shall jointly select a third
physician, who shall make the determination. The determination of any such
physician shall be final and conclusive for all purposes of this Agreement. The
Executive or his legal representative or any adult member of his immediate
family shall have the right to present to such physician such information and
arguments as to the Executive's disability as he, she or they deem appropriate,
including the opinion of the Executive's personal physician.
(b) Voluntary Termination. Notwithstanding anything in this
Agreement to the contrary, following a Change in Control the Executive may, upon
not less than 30 days' written notice to the Company, voluntarily terminate
employment for any reason (including early retirement under the terms of any of
the Company's retirement plans as in effect from time to time), provided that
any termination by the Executive pursuant to Section 6(d) on account of Good
Reason (as defined therein) shall not be treated as a voluntary termination
under this Section 6(b).
(c) Cause. The Company may terminate the Executive's employment for
Cause. For purposes of this Agreement, "Cause" means (i) the Executive's
conviction of a felony or the entering by the Executive of a plea of nolo
contendere to a felony charge, (ii) the Executive's gross neglect, willful
malfeasance or willful gross misconduct in connection with his employment
hereunder which has had a material adverse effect on the business of the Company
and its subsidiaries, unless the Executive reasonably believed in good faith
that such act or nonact was in or not opposed to the best interests of the
Company, or (iii) repeated material violations by the Executive of his
obligations under Section 4 of this Agreement, which violations are demonstrably
willful and deliberate on the Executive's part and which result in material
damage to the Company's business or reputation.
(d) Good Reason. Following the occurrence of a Change in Control,
the Executive may terminate his employment for Good Reason. For purposes of this
Agreement, "Good Reason" means the occurrence of any of the following, without
the express written consent of the Executive, after the occurrence of a Change
in Control:
(i) (A) the assignment to the Executive of any duties
inconsistent with the Executive's position, authority or responsibilities
as contemplated by Section 4 of this Agreement, or (B) any other material
adverse change in such position, including titles, authority or
responsibilities;
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(ii) any failure by the Company to comply with any of the
provisions of Section 5 of this Agreement, other than an insubstantial or
inadvertent failure remedied by the Company promptly after receipt of
notice thereof given by the Executive;
(iii) the Company's requiring the Executive to be based at any
office or location more than 35 miles (or such other distance as shall be
set forth in the Company's relocation policy as in effect at the Effective
Time) from that location at which he performed his services specified
under the provisions of Section 4 immediately prior to the Change in
Control, except for travel reasonably required in the performance of the
Executive's responsibilities;
(iv) any other material breach of this Agreement by the
Company; or
(v) any failure by the Company to obtain the assumption and
agreement to perform this Agreement by a successor as contemplated by
Section 12(b).
In no event shall the mere occurrence of a Change in Control, absent any further
impact on the Executive, be deemed to constitute Good Reason.
(e) Notice of Termination. Any termination by the Company for Cause
or by the Executive for Good Reason shall be communicated by Notice of
Termination to the other party hereto given in accordance with Section 13(e).
For purposes of this Agreement, a "Notice of Termination" means a written notice
given, in the case of a termination for Cause, within 10 business days of the
Company's having actual knowledge of the events giving rise to such termination,
and in the case of a termination for Good Reason, within 180 days of the
Executive's having actual knowledge of the events giving rise to such
termination, and 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 termination date
is other than the date of receipt of such notice, specifies the termination date
of the Executive's employment (which date shall be not more than 15 days after
the giving of such notice). The failure by the Executive to set forth in the
Notice of Termination any fact or circumstance which contributes to a showing of
Good Reason shall not waive any right of the Executive hereunder or preclude the
Executive from asserting such fact or circumstance in enforcing his rights
hereunder.
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(f) Date of Termination. For the purpose of this Agreement, the term
"Date of Termination" means (i) in the case of a termination for which a Notice
of Termination is required, the date of receipt of such Notice of Termination
or, if later, the date specified therein, as the case may be, and (ii) in all
other cases, the actual date on which the Executive's employment terminates
during the Employment Period.
7. Obligations of the Company upon Termination.
(a) Death or Disability. If the Executive's employment is terminated
during the Employment Period by reason of the Executive's death or Disability,
this Agreement shall terminate without further obligations to the Executive or
the Executive's legal representatives under this Agreement other than those
obligations accrued hereunder at the Date of Termination, and the Company shall
pay to the Executive (or his beneficiary or estate) (i) the Executive's full
Base Salary through the Date of Termination (the "Earned Salary"), (ii) any
vested amounts or vested benefits owing to the Executive under the Company's
otherwise applicable employee benefit plans and programs, including any
compensation previously deferred by the Executive (together with any accrued
earnings thereon) and not yet paid by the Company and any accrued vacation pay
not yet paid by the Company (the "Accrued Obligations"), and (iii) any other
benefits payable due to the Executive's death or Disability under the Company's
plans, policies or programs (the "Additional Benefits").
Any Earned Salary shall be paid in cash in a single lump sum as soon
as practicable, but in no event more than 30 days (or at such earlier date
required by law), following the Date of Termination. Accrued Obligations and
Additional Benefits shall be paid in accordance with the terms of the applicable
plan, program or arrangement.
(b) Cause and Voluntary Termination. If the Executive's employment
shall be terminated for Cause or voluntarily terminated by the Executive (other
than on account of Good Reason following a Change in Control), the Company shall
pay the Executive (i) the Earned Salary in cash in a single lump sum as soon as
practicable, but in no event more than 10 days, following the Date of
Termination, and (ii) the Accrued Obligations in accordance with the terms of
the applicable plan, program or arrangement.
(c) Termination by the Company other than for Cause and Termination
by the Executive for Good Reason.
(i) Lump Sum Payments. If, during the Employment Period, the
Company terminates the Executive's employment other than for Cause, or
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following a Change in Control the Executive terminates his employment for
Good Reason, the Company shall pay to the Executive the following amounts:
(A) the Executive's Earned Salary;
(B) a cash amount (the "Severance Amount") equal to
<> times the sum of (x) the Executive's
annual Base Salary and (y) an amount equal to the
average of the annual bonuses paid to the Executive with
respect to each of the last three calendar years ended
prior to the Change in Control (or, if at the Date of
Termination, the Executive has been employed for less
than three full calendar years, for the number of full
calendar years during which the Executive was employed);
(C) the Accrued Obligations.
The Earned Salary and Severance Amount shall be paid in cash in a single
lump sum as soon as practicable, but in no event more than 30 days (or at
such earlier date required by law), following the Date of Termination.
Accrued Obligations shall be paid in accordance with the terms of the
applicable plan, program or arrangement.
(ii) Continuation of Benefits. If, during the Employment
Period, the Company terminates the Executive's employment other than for
Cause, or following a Change in Control the Executive terminates his
employment for Good Reason, the Executive (and, to the extent applicable,
his dependents) shall be entitled, after the Date of Termination until the
earlier of (1) the [second](1) anniversary of the Date of Termination (the
"End Date") and (2) the date the Executive becomes eligible for comparable
benefits under a similar plan, policy or program of a subsequent employer,
to continue participation in all of the Company's employee and executive
welfare and fringe benefit plans (the "Benefit Plans"). To the extent any
such benefits cannot be provided under the terms of the applicable plan,
policy or program, the Company shall provide a comparable benefit under
another plan or from the Company's general assets. The Executive's
participation in the Benefit Plans will be on the same terms and
conditions that would have applied had the Executive continued to be
employed by the Company
-----------
(1) Third anniversary in the case of chief executive officer.
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through the End Date.
(iii) Vesting and Exercisability of Stock Options. If, during
the Employment Period, the Company terminates the Executive's employment
other than for Cause, or the Executive terminates his employment for Good
Reason, all outstanding options held by the Executive to purchase shares
of Common Stock of the Company ("Options") shall become fully vested on
the date of such termination of employment and the Executive shall have
the right to exercise the Options, whether or not such Options would
otherwise be exercisable, for a period of ninety days following such
termination of employment (or, if less, until the end of the stated term
of the Options).
(iv) Vesting of Performance Unit Awards. Upon a Change in
Control, (1) all Performance Unit awards for which the earned value has
not yet been determined as of the date of the Change in Control shall be
deemed to have earned a value equal to the greater of (A) the target value
of the Performance Unit award (including any Dividend Equivalent Rights
("DERs") declared thereon), or (B) the actual value of such Performance
Unit award (including all DERs declared thereon) calculated as if the
performance period during which total shareholder return is measured had
terminated as of the Change in Control (without proration of such award),
and (2) all earned but unvested Performance Units, including those earned
in accordance with the preceding clause (1), shall become fully vested.
(d) Discharge of the Company's Obligations. Except as
expressly provided in the last sentence of this Section 7(d), the amounts
payable to the Executive pursuant to this Section 7 (whether or not
reduced pursuant to Section 7(e)) following termination of his employment
shall be in full and complete satisfaction of the Executive's rights under
this Agreement and any other claims he may have in respect of his
employment by the Company or any of its subsidiaries. Such amounts shall
constitute liquidated damages with respect to any and all such rights and
claims and, upon the Executive's receipt of such amounts, the Company
shall be released and discharged from any and all liability to the
Executive in connection with this Agreement or otherwise in connection
with the Executive's employment with the Company and its subsidiaries.
Nothing in this Section 7(d) shall be construed to release the Company
from its commitment to indemnify the Executive and hold the Executive
harmless from and against any claim, loss or cause of action arising from
or out of the Executive's performance as an officer, director or employee
of the Company or any of its subsidiaries or in any other capacity,
including any fiduciary capacity, in which the Executive served
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at the request of the Company to the maximum extent permitted by
applicable law.
(e) Certain Further Payments by the Company.
(i) Application of Section 7(e). In the event that any amount
or benefit paid or distributed to the Executive pursuant to this
Agreement, taken together with any amounts or benefits otherwise paid or
distributed to the Executive by the Company or any affiliated company
(collectively, the "Covered Payments"), are or become subject to the tax
(the "Excise Tax") imposed under Section 4999 of the Code or any similar
tax that may hereafter be imposed, the Company shall pay to the Executive
at the time specified in Section 7(e)(v) below an additional amount (the
"Tax Reimbursement Payment") such that the net amount retained by
Executive with respect to such Covered Payments, after deduction of any
Excise Tax on the Covered Payments and any Federal, state and local income
tax and Excise Tax on the Tax Reimbursement Payment provided for by this
Section 7(e), but before deduction for any Federal, state or local income
or employment tax withholding on such Covered Payments, shall be equal to
the amount of the Covered Payments.
(ii) Application of Section 280G. For purposes of determining
whether any of the Covered Payments will be subject to the Excise Tax and
the amount of such Excise Tax,
(A) such Covered Payments will be treated as "parachute
payments" within the meaning of Section 280G of the
Code, and all "parachute payments" in excess of the
"base amount" (as defined under Section 280G(b)(3) of
the Code) shall be treated as subject to the Excise Tax,
unless, and except to the extent that, in the good faith
judgment of the Company's independent certified public
accountants appointed prior to the Effective Date or tax
counsel selected by such accountants (the
"Accountants"), the Company has a reasonable basis to
conclude that such Covered Payments (in whole or in
part) either do not constitute "parachute payments" or
represent reasonable compensation for personal services
actually rendered (within the meaning of Section
280G(b)(4)(B) of the Code) in excess of the "base
amount," or such "parachute payments" are otherwise not
subject to such Excise Tax, and
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(B) the value of any non-cash benefits or any deferred
payment or benefit shall be determined by the
Accountants in accordance with the principles of Section
280G of the Code.
(iii) Calculation of Tax Reimbursement Payment. For purposes
of determining the amount of the Tax Reimbursement Payment, the Executive
shall be deemed to pay:
(A) Federal income taxes at the highest applicable marginal
rate of Federal income taxation for the calendar year in
which the Tax Reimbursement Payment is to be made, and
(B) any applicable state and local income taxes at the
highest applicable marginal rate of taxation for the
calendar year in which the Tax Reimbursement Payment is
to be made, net of the maximum reduction in Federal
incomes taxes which could be obtained from the deduction
of such state or local taxes if paid in such year.
(iv) Adjustments in Respect of Tax Reimbursement Payment. In
the event that the Excise Tax is subsequently determined by the
Accountants or pursuant to any proceeding or negotiations with the
Internal Revenue Service to be less than the amount taken into account
hereunder in calculating the Tax Reimbursement Payment made, the Executive
shall repay to the Company, at the time that the amount of such reduction
in the Excise Tax is finally determined, the portion of such prior Tax
Reimbursement Payment that would not have been paid if such Excise Tax had
been applied in initially calculating such Tax Reimbursement Payment, plus
interest on the amount of such repayment at the rate provided in Section
1274(b)(2)(B) of the Code. Notwithstanding the foregoing, in the event any
portion of the Tax Reimbursement Payment to be refunded to the Company has
been paid to any Federal, state or local tax authority, repayment thereof
shall not be required until actual refund or credit of such portion has
been made to the Executive, and interest payable to the Company shall not
exceed interest received or credited to the Executive by such tax
authority for the period it held such portion. The Executive and the
Company shall mutually agree upon the course of action to be pursued (and
the method of allocating the expenses thereof) if the Executive's good
faith claim for refund or credit is denied.
In the event that the Excise Tax is later determined by the
Accountants or pursuant to any proceeding or negotiations with the
Internal
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Revenue Service to exceed the amount taken into account hereunder at the
time the Tax Reimbursement Payment is made (including, but not limited to,
by reason of any payment the existence or amount of which cannot be
determined at the time of the Tax Reimbursement Payment), the Company
shall make an additional Tax Reimbursement Payment in respect of such
excess (plus any interest or penalty payable with respect to such excess)
at the time that the amount of such excess is finally determined.
(v) Payment. The Tax Reimbursement Payment (or portion
thereof) provided for in Section 7(e)(i) above shall be paid to the
Executive not later than 10 business days following the payment of the
Covered Payments; provided, however, that if the amount of such Tax
Reimbursement Payment (or portion thereof) cannot be finally determined on
or before the date on which payment is due, the Company shall pay to the
Executive by such date an amount estimated in good faith by the
Accountants to be the minimum amount of such Tax Reimbursement Payment and
shall pay the remainder of such Tax Reimbursement Payment (together with
interest at the rate provided in Section 1274(b)(2)(B) of the Code) as
soon as the amount thereof can be determined, but in no event later than
45 calendar days after payment of the related Covered Payment. In the
event that the amount of the estimated Tax Reimbursement Payment exceeds
the amount subsequently determined to have been due, such excess shall
constitute a loan by the Company to the Executive, payable on the fifth
business day after written demand by the Company for payment (together
with interest at the rate provided in Section 1274(b)(2)(B) of the Code).
8. Nonexclusivity of Rights. Except as expressly provided herein, 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 of its affiliated companies and for which the Executive
may qualify, nor shall anything herein limit or otherwise prejudice such rights
as the Executive may have under any other agreements with the Company or any of
its affiliated companies, including employment agreements or stock option
agreements. Amounts which are vested benefits or which the Executive is
otherwise entitled to receive under any plan or program of the Company or any of
its affiliated companies at or subsequent to the Date of Termination shall be
payable in accordance with such plan or program.
9. No Mitigation or Offset. The Executive shall have no obligation to seek
other employment and, except as expressly provided in Sections 7(c)(ii), there
shall be no offset against amounts due to Executive under this Agreement on
account of any remuneration attributable to subsequent employment that he may
obtain. The Company's
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obligation to make the payments provided for in this Agreement and otherwise to
perform its obligations hereunder shall not be affected by any circumstances,
including, without limitation, any set-off, counterclaim, recoupment, defense or
other right which the Company may have against the Executive or others,
including, without limitation, any claim arising due to the Executive's
violation of his covenants under Section 11(a) hereof. In the event that the
Executive shall in good faith give a Notice of Termination for Good Reason and
it shall thereafter be determined that Good Reason did not exist, the employment
of the Executive shall, unless the Company and the Executive shall otherwise
mutually agree, be deemed to have terminated, at the date of giving such
purported Notice of Termination, by mutual consent of the Company and the
Executive and the Executive shall be entitled to receive only his Earned Salary
and the Accrued Obligations which he would have been entitled to receive upon a
voluntary termination.
10. Legal Fees and Expenses. If the Executive asserts any claim in any
contest (whether initiated by the Executive or by the Company) as to the
validity, enforceability or interpretation of any provision of this Agreement,
the Company shall pay the Executive's legal expenses (or cause such expenses to
be paid) including, without limitation, his reasonable attorney's fees, on a
quarterly basis, upon presentation of proof of such expenses in a form
acceptable to the Company, provided that the Executive shall reimburse the
Company for such amounts, plus simple interest thereon at the 90-day United
States Treasury Xxxx rate as in effect from time to time, compounded annually,
if the Executive shall not prevail, in whole or in part, as to any material
issue as to the validity, enforceability or interpretation of any provision of
this Agreement.
11. Confidential Information; Company Property. By and in consideration of
the salary and benefits to be provided by the Company hereunder, including the
severance arrangements set forth herein, the Executive agrees that:
(a) Confidential Information. The Executive shall hold in a
fiduciary capacity for the benefit of the Company all secret or confidential
information, knowledge or data relating to the Company or any of its affiliated
companies, and their respective businesses, (i) obtained by the Executive during
his employment by the Company or any of its affiliated companies and (ii) not
otherwise public knowledge (other than by reason of an unauthorized act by the
Executive). After termination of the Executive's employment with the Company,
the Executive shall not, without the prior written consent of the Company,
unless compelled pursuant to an order of a court or other body having
jurisdiction over such matter, communicate or divulge any such information,
knowledge or data to anyone other than the Company and those designated by it.
The Executive acknowledges and agrees that the covenants and obligations of the
Executive with respect to confidentiality relate to special, unique and
extraordinary matters and that a violation
15
of any of the terms of such covenants and obligations will cause the Company
irreparable injury for which adequate remedies are not available at law.
Therefore, the Executive agrees that the Company shall be entitled to an
injunction, restraining order or such other equitable relief (without the
requirement to post bond) restraining Executive from committing any violation of
the covenants and obligations contained in this Section 11(a). These remedies
are cumulative and are in addition to any other rights and remedies the Company
may have at law or in equity.
(b) Company Property. Except as expressly provided herein, promptly
following the Executive's termination of employment, the Executive shall return
to the Company all property of the Company and all copies thereof in the
Executive's possession or under his control, except that the Executive may
retain his personal notes, diaries, Rolodexes, calendars and correspondence.
12. Successors.
(a) This Agreement is personal to the Executive and, without the
prior written consent of the Company, shall not be assignable by the Executive
otherwise than by will or the laws of descent and distribution. This Agreement
shall inure to the benefit of and be enforceable by the Executive's legal
representatives.
(b) This Agreement shall inure to the benefit of and be binding upon
the Company and its successors. The Company shall require any successor to all
or substantially all of the business and/or assets of the Company, whether
direct or indirect, by purchase, merger, consolidation, acquisition of stock, or
otherwise, by an agreement in form and substance satisfactory to the Executive,
expressly to assume and agree to perform this Agreement in the same manner and
to the same extent as the Company would be required to perform if no such
succession had taken place.
13. Miscellaneous.
(a) Applicable Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New Jersey, applied
without reference to principles of conflict of laws.
(b) Arbitration. Except to the extent provided in Section 11(a), any
dispute or controversy arising under or in connection with this Agreement shall
be resolved by binding arbitration. The arbitration shall be held in Newark, New
Jersey and except to the extent inconsistent with this Agreement, shall be
conducted in accordance with the Expedited Employment Arbitration Rules of the
American Arbitration
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Association (or such other voluntary arbitration rules applicable to employment
contract disputes) in effect at the time of the arbitration, supplemented, as
necessary, by those principles which would be applied by a court of law or
equity. The arbitrator shall be acceptable to both the Company and the
Executive. If the parties cannot agree on an acceptable arbitrator, the dispute
shall be heard by a panel of three arbitrators, one appointed by each of the
parties and the third appointed by the other two arbitrators.
(c) Amendments. This Agreement may not be amended or modified
otherwise than by a written agreement executed by the parties hereto or their
respective successors and legal representatives.
(d) Entire Agreement. This Agreement constitutes the entire
agreement between the parties hereto with respect to the matters referred to
herein. No other agreement relating to the terms of the Executive's employment
by the Company, oral or otherwise, shall be binding between the parties unless
it is in writing and signed by the party against whom enforcement is sought.
There are no promises, representations, inducements or statements between the
parties other than those that are expressly contained herein. The Executive
acknowledges that he is entering into this Agreement of his own free will and
accord, and with no duress, that he has read this Agreement and that he
understands it and its legal consequences.
(e) Notices. All notices and other communications hereunder shall be
in writing and shall be given by hand-delivery to the other party or by
registered or certified mail, return receipt requested, postage prepaid,
addressed as follows:
If to the Executive: at the home address of the Executive noted on
the records of the Company
If to the Company: New Jersey Resources Corporation
0000 Xxxxxxx Xxxx
Xxxx, Xxx Xxxxxx 00000
Attn.: Secretary
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.
(f) Tax Withholding. The Company shall withhold from any amounts
payable under this Agreement such Federal, state or local taxes as shall be
required to be withheld pursuant to any applicable law or regulation.
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(g) Severability; Reformation. In the event that one or more of the
provisions of this Agreement shall become invalid, illegal or unenforceable in
any respect, the validity, legality and enforceability of the remaining
provisions contained herein shall not be affected thereby. In the event that any
of the provisions of any of Section 11(a) are not enforceable in accordance with
its terms, the Executive and the Company agree that such Section shall be
reformed to make such Section enforceable in a manner which provides the Company
the maximum rights permitted at law.
(h) Waiver. Waiver by any party hereto of any breach or default by
the other party of any of the terms of this Agreement shall not operate as a
waiver of any other breach or default, whether similar to or different from the
breach or default waived. No waiver of any provision of this Agreement shall be
implied from any course of dealing between the parties hereto or from any
failure by either party hereto to assert its or his rights hereunder on any
occasion or series of occasions.
(i) Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed an original but all of which together shall
constitute one and the same instrument.
(j) Captions. The captions of this Agreement are not part of the
provisions hereof and shall have no force or effect.
IN WITNESS WHEREOF, the Executive has hereunto set his hand and the
Company has caused this Agreement to be executed in its name on its behalf, and
its corporate seal to be hereunto affixed and attested by its Secretary, all as
of the day and year first above written.
NEW JERSEY RESOURCES CORPORATION
_________________________________________
By: XXXXXXXX X. XXXXXX
Title:President and Chief Executive Officer
ATTEST:
________________________
XXXXXX X. XXXXXXXX
Corporate Secretary
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_________________________________________
<>
WITNESSED:
___________________
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