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EXHIBIT 10-BF(a)
EMPLOYMENT AGREEMENT
THIS AGREEMENT, made this 17th day of January 1996, between Xxxxxxxxx
Xxxx Xxxxxx (the "Executive"), and The Columbia Gas System, Inc. (the
"Company").
W I T N E S S E T H:
WHEREAS, the Company wishes to secure the services of the Executive as
Chief Executive Officer of its two wholly-owned subsidiary companies, Columbia
Gas Transmission Corporation and Columbia Gulf Transmission Company (the
"Transmission Companies"); and
WHEREAS, the Executive is willing to serve as Chief Executive Officer
of the Transmission Companies, and to enter into this Agreement on the terms
and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual promises herein
contained, the Company and the Executive hereby agree as follows:
1. Employment. The Company shall employ the Executive, and the
Executive shall serve, as Chief Executive Officer of the Transmission Companies
commencing January 17, 1996.
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As Chief Executive Officer of the Transmission Companies, the
Executive will report directly and solely to the Chairman, President and Chief
Executive Officer of the Company. The Executive agrees to faithfully perform
the duties of Chief Executive Officer to the best of her ability and, except
for vacations and periods of temporary illness, to devote her full time and
attention to the Transmission Companies' business. If elected, the Executive
also agrees to serve as a director and/or officer of any subsidiary or
affiliate of the Company.
2. Compensation. For all services to be rendered by the
Executive under this Agreement, the Executive shall be paid compensation and
receive benefits from the Transmission Companies as follows:
(a) Base Salary. A base salary of $325,000 per annum,
payable in accordance with the usual manner of payment of executive salaries by
the Transmission Companies. Any increases that the Executive would be entitled
to shall be administered in the same manner as is applicable to all other
senior executives of the Transmission Companies as shall be approved by their
Board of Directors. The term "base salary", for the purpose of this Agreement,
shall include any increases, and, as increased, shall be reduced only if such
reduction is part of and consistent with an across-the-board reduction of
salaries which occurs prior to a change in control, as described in paragraph
(e) of Section 6, and which affects all members of the senior management of the
Transmission Companies; provided, however, that the base salary shall in no
case be reduced below $325,000 per annum.
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(b) Incentive Compensation Plan. The Executive shall
participate in the Transmission Companies' incentive compensation plan and all
other incentive programs for officers of the Transmission Companies as
appropriate for her status.
(c) Grant of Contingent Stock. Ninety (90) days after the
Executive commences employment with the Transmission Companies, the Company
shall transfer to the Executive 1,500 shares of the Company's Common Stock, in
consideration of the Executive's resignation from employment with her present
employer and her willingness to accept employment with the Transmission
Companies. This transfer shall be subject to the approval of a new Long Term
Incentive Plan at the Company's April, 1996 Annual Stockholders Meeting. If
such Long Term Incentive Plan is not approved, then a cash payment equivalent
to the fair market value of the shares of Contingent Stock as of the date of
the Annual Stockholder's Meeting shall be made in lieu of the grant of
Contingent Stock.
3. Reimbursement of Expenses. The parties recognize that in the
course of performing her duties under this Agreement, the Executive will incur
out-of-pocket expenses for the account of the Transmission Companies. The
Executive shall be entitled to reimbursement for all reasonable out-of-pocket
expenses so incurred, upon submission to the Transmission Companies of an
adequate, written accounting.
4. Fringe Benefits. The Executive shall be eligible to
participate fully in all fringe benefits provided by the Transmission Companies
for its employees in general, or for its executives, including, but not limited
to, the Pension Restoration Plan, the Thrift
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Restoration Plan, any pension plan or profit sharing plan, maintained from time
to time by the Transmission Companies, and any life, accident, health,
hospitalization or long-term disability insurance, maintained from time to time
by the Transmission Companies. The eligibility requirements under the
Transmission Companies' Sick Leave Plan shall be waived so that the Executive
shall at all times be eligible to receive the maximum benefits under such plan;
i.e., twenty-six weeks at full pay. The Executive shall also be entitled to
receive benefits under the Transmission Companies' Transfer of Personnel Plan.
Subject to any applicable legal limitations, the Executive shall continue to
participate in any such fringe benefits, or be provided an equivalent amount of
cash payments, during the period the Executive is receiving the payments set
forth in paragraph (a)(i) of Section 7 of this Agreement (Severance Benefit).
5. Vacation. The Executive shall be entitled to four weeks of
paid vacation for each consecutive 12-month period during her employment by the
Transmission Companies.
6. Termination. The Executive's employment shall be terminated
upon the first to occur of the following:
(a) The Executive's death.
(b) The Executive becoming permanently disabled. Permanent
disability shall mean physical or mental incapacity of a nature which
prevents the Executive, in the sole judgment of the Board of Directors of the
Transmission Companies, from performing her duties under this Agreement.
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(c) The Executive's employment being terminated by the
Transmission Companies for any reason other than for cause. Termination for
cause shall mean termination by action of the Board of Directors of the
Transmission Companies because of the willful failure of the Executive to
perform her duties and obligations under this Agreement or gross negligence in
the performance of her duties under this Agreement or the commission by the
Executive of a felony.
(d) The 90th day after the Executive notifies the
Transmission Companies in writing that she is terminating her employment as a
result of the Board of Directors of the Transmission Companies removing her
from the position of Chief Executive Officer, or a material reduction in her
duties and responsibilities in any such position. Any notice pursuant to this
paragraph must be given in writing no later than ninety (90) days after the
Board of Directors of the Transmission Companies fails to initially elect,
reelect, or removes, the Executive or after the material reduction in the
Executive's duties or responsibilities.
(e) The 90th day after the Executive notifies the
Transmission Companies (or any successor to the Transmission Companies) in
writing that she is terminating her employment as a result of one of the
following events:
(i) The Shareholders of the Company approve an agreement for
the sale or other disposition of all or substantially all of the
assets of the Company through a sale, merger, consolidation, or other
business combination transaction.
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(ii) The acquisition by any person or group of
associated persons of beneficial ownership of 25% or more of
the voting securities of the Company (other than a pro forma
transaction for a purpose such as changing the name or state of
incorporation of the Company).
(iii) During any period of 24 consecutive months,
individuals who at the beginning of such period constitute the Board
of Directors of the Company and any new directors whose
election by the Board of Directors of the Company or nomination for
election by the Company's Shareholders was approved by a vote of at
least 2/3 of the directors then still in office who either were
directors at the beginning of the period or whose election or
nomination for election was previously so approved, cease for any
reason to constitute a majority of the Board of Directors of the
Company.
Any notice pursuant to this paragraph must be given in writing no later than
180 days after such event.
(f) The Executive notifies the Transmission Companies
that she is terminating her employment, or the Transmission Companies notify
the Executive that the Executive's employment is being terminated, for any
reason not set forth in the preceding paragraphs of this Section.
7. Termination Benefits.
(a) If the Executive's employment is terminated for any of
the reasons set forth in paragraph (c) or (d) of Section 6 (termination by the
Transmission Companies
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without cause or termination by the Executive for cause), the Transmission
Companies shall pay, or provide, to the Executive the following termination
benefits:
(i) Severance Benefit. A severance benefit in an amount
equal to the sum of (A) the Executive's then annual base salary for a
period of 24 months, or, if the Executive's employment is terminated
before the first anniversary of the signing of this Agreement by the
Company and the Executive, a period of 24 months plus the number of
months and days between the date the Executive's employment is
terminated and the first anniversary of the signing of this Agreement
by the Company and the Executive, and (B) a reasonable estimate of the
incentive compensation the Executive would have received under the
Transmission Companies' incentive compensation plan during such 24
month or longer period if her employment had not terminated. Such
benefit shall be paid in monthly installments over such 24 month or
longer period and shall commence within a reasonable period of time
after such termination.
(ii) New Employment Assistance. Reasonable assistance in
obtaining new employment, including, but not limited to, the use of an
office, a telephone, and normal secretarial and other office services.
(iii) Payment of Accrued Vacation. Payment for all
vacation periods earned and accrued to the date of such termination
but not taken. Such payment shall be made in a single sum within a
reasonable period of
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time after such termination.
(b) If the period of employment is terminated for the reason
set forth in paragraph (a) of Section 6 (death), the Executive's designated
beneficiary shall receive, in addition to the death and other benefits provided
under the Transmission Companies' fringe benefit programs, the termination
benefits set forth in paragraph (iii) of this Section (Payment of Accrued
Vacation).
(c) If the period of employment is terminated for the reason
set forth in paragraph (b) of Section 6 (disability), the Executive shall
receive, in addition to the disability benefits provided under the Transmission
Companies' fringe benefit programs, the termination benefits set forth in
paragraph (iii) of this Section (Payment of Accrued Vacation).
(d) If the period of employment is terminated for the reason
set forth in paragraph (e) of Section 6 (change in control), the Executive
shall receive the termination benefits set forth in paragraphs (a)(i), (ii) and
(iii) of this Section (Severance Benefit, New Employment Assistance and Payment
of Accrued Vacation), except that the amount to be paid under paragraph (a)(i)
(Severance Benefit) shall be equal to the sum of (A) the Executive's then
annual base salary for a period of 36 months, and (B) a reasonable estimate of
the incentive compensation the Executive would have received under the
Transmission Companies' incentive compensation plan, during such 36 month
period if her employment had not terminated. Such benefit shall be paid in
monthly installments over such 36 month period and shall commence within a
reasonable period of time after
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such termination. Notwithstanding the preceding to the contrary, in the event
that any payments or benefits received or to be received by the Executive in
connection with the Executive's termination of employment (whether under the
terms of this Agreement or any other plan, arrangement or agreement with the
Transmission Companies , the Company or any of its subsidiaries) would subject
the Executive to an excise tax under Section 4999 of the Internal Revenue Code
of 1986, as amended (the "Code"), then to the extent necessary to eliminate the
imposition of such an excise tax (and after taking into account any reduction
in payments or benefits under any such other plan, arrangement or agreement),
the payments under paragraph (a) (i) of this Section 6 (Severance Benefit)
shall be reduced.
(e) If the period of employment is terminated for the reason
set forth in paragraph (f) of Section 6 (any other reason), the Executive shall
receive only the termination benefit set forth in paragraph (a) (iii) of this
Section (Payment of Accrued Vacation).
8. Payment of Legal Fees and Expenses. The Transmission
Companies shall also pay to the Executive reasonable legal fees and expenses
incurred in good faith by the Executive as a result of a termination which
entitles the Executive to benefits under the Agreement (including, but not
limited to, all such fees and expenses incurred in disputing any such
termination or in seeking in good faith to obtain or enforce any benefit or
right provided by this Agreement or in connection with any tax audit or
proceeding to the extent attributable to the application of Section 4999 of the
Code to any payment or
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benefit provided hereunder). Such payments shall be made within 5 business
days after delivery of the Executive's written requests for payment accompanied
with such evidence of fees and expenses incurred as the Company reasonably may
require.
9. Designation of Beneficiary. The Executive may designate a
beneficiary or beneficiaries, who may be designated contingently or
successively and who may be an entity other than a natural person, to receive
any termination benefits which may become payable under Section 7 in the event
of the Executive's death. Any such designation may, from time to time and at
any time, be changed or canceled by the Executive without the consent of any
beneficiary. Any such designation must be by written notice delivered to the
Transmission Companies. If the Executive designates more than one beneficiary,
any payments to the Executive's beneficiaries shall be made in equal shares
unless the Executive designates otherwise.
10. Withholding of Taxes. Any payments to the Executive, or to
her designated beneficiary or beneficiaries, pursuant to the terms of this
Agreement shall be reduced by such amounts as are required to be withheld with
respect thereto under all present and future federal, state and local tax laws
and regulations and other laws and regulations.
11. Notices. Any notice to be given to the Executive by the
Transmission Companies under this Agreement shall be deemed to have been given
by the Transmission Companies and received by the Executive if and when it is
hand delivered to the Executive or it is sent by registered or certified mail
to the Executive at 0000 Xxxxxx, Xxxxxxx, XX 00000, or such other address as
may be given by the Executive in
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writing to the Transmission Companies. Any notice to be given to the
Transmission Companies by the Executive under this Agreement shall be deemed to
have been given by the Executive and received by the Transmission Companies if
and when it is hand delivered by the Executive to the Secretary of the
Transmission Companies or it is sent by registered or certified mail, addressed
to the Board of Directors of the Transmission Companies at 0000 XxxXxxxxx
Xxxxxx, Xxxxxxxxxx, XX 00000, or such other address as may be given by the
Transmission Companies in writing to the Executive.
12. Full and Complete Agreement; Amendment. This Agreement
constitutes the full and complete understanding and agreement of the parties
and supersedes all prior understandings and agreements. This Agreement may be
modified only by a written instrument executed by both parties.
13. Nonassignability. This Agreement and the rights and benefits
hereunder are personal to the Company and the Transmission Companies and are
not assignable or transferrable, nor may the services to be performed hereunder
be assigned by the Company or the Transmission Companies to any person, firm or
corporation; provided, however, that this Agreement and the rights and benefits
hereunder may be assigned by the Company and the Transmission Companies to any
corporation acquiring all or substantially all of the assets of the Company or
the Transmission Companies or to any corporation into which the Company or the
Transmission Companies may be merged or consolidated, and this Agreement and
the rights and benefits hereunder will automatically be deemed assigned to any
such corporation. The Executive's rights and interest under
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this Agreement may not be assigned, pledged or encumbered by the Executive.
The provisions of this Agreement shall enure to the benefit of the Executive's
heirs, executors, administrators and successors in interest.
14. Construction. This Agreement shall be construed under the
laws of the State of Delaware.
15. Execution in Counterparts. This Agreement may be executed
simultaneously in one or more counterparts, each of which shall be deemed an
original, but all of which shall constitute one and the same instrument.
16. Titles and Headings. Titles and headings to Sections herein
are for purposes of reference only, and shall in no way limit, define or
otherwise affect the meaning or interpretation of any of the provisions of this
Agreement.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first set forth above.
THE COLUMBIA GAS SYSTEM, INC.
(Corporate Seal)
By: /s/ O.G. XXXXXXX, III
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ATTEST: Chairman, President and
Chief Executive Officer
/s/ X.X. XXXXXX
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Secretary
/s/ XXXXXXXXX XXXX XXXXXX
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Xxxxxxxxx Xxxx Xxxxxx
