EXHIBIT 10(m)
MANAGEMENT SUCCESSION AND CONSULTING AGREEMENT
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This MANAGEMENT SUCCESSION AND CONSULTING AGREEMENT (the
"Agreement") is made as of October 1, 1995, by and between Aquarion
Company ("Aquarion"), a Delaware corporation having its principal
office in Bridgeport, Connecticut, and Xxxx X. XxXxxxxx, a resident of
Easton, Connecticut ('Executive").
W I T N E S S E T H:
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WHEREAS, Executive is the President and Chief Executive Officer
of Aquarion;
WHEREAS, Executive has determined to retire as President and
Chief Executive Officer of Aquarion, while continuing to play an
active role in supporting its management, in order to devote a major
part of his time to development activities in the greater Bridgeport
region and to the rebuilding of the City of Bridgeport;
WHEREAS, Aquarion has identified or will soon identify the
successor to Executive as its President and Chief Executive Officer;
WHEREAS, Aquarion and Executive each desire to ensure the
continuity of Aquarion's management and to establish an orderly
transition procedure with respect to the positions of President and
Chief Executive Officer;
WHEREAS, as part of such transition procedure, Aquarion desires
to retain Executive as a consultant following the termination of his
employment;
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WHEREAS, Executive desires to cooperate with his successor as
Aquarion's President and Chief Executive Officer, and is willing to
serve as a consultant to Aquarion following the termination of his
employment; and
WHEREAS, Aquarion desires to ensure Executive's cooperation in
connection with such transition and to compensate Executive for
certain reductions in Executive's employee benefits as a result of the
termination of his employment and such transition.
NOW, THEREFORE, in consideration of the premises and mutual
covenants contained herein, Aquarion and Executive, intending to be
legally bound, do hereby agree as follows:
1. Certain Defined Terms: In addition to terms defined
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elsewhere herein, the following terms shall have the following
meanings when used in this Agreement with initial capital letters:
(a) "Board" means the Board of Directors of Aquarion.
(b) "Cause" means that Executive, in the reasonable
determination of the Board, shall have:
i) committed an intentional act of fraud,
embezzlement, or theft in connection with Executive's
duties or in the course of either his employment with
Aquarion or his service as a consultant to Aquarion;
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ii) caused intentional wrongful and material damage
to property of Aquarion or any of its subsidiaries;
iii) intentionally and wrongfully disclosed
confidential information of Aquarion or any of its
subsidiaries;
iv) engaged in any gross negligence or gross
misconduct in the course of either his employment with
Aquarion or his service as a consultant to Aquarion;
v) been convicted of a felony; or
vi) materially breached his obligations under this
Agreement and shall have not remedied such breach
within thirty (30) days after receiving notice from the
Board specifying the details thereof.
For purposes of this Agreement, an act or omission on the part of
Executive shall be deemed "intentional" if it was not due primarily to
an error in judgment or negligence and was done by Executive not in
good faith and without reasonable belief that the act or omission was
in the best interests of Aquarion.
(c) "Consulting Period" means the period commencing the day
following the date of Termination of Executive as an employee of
Aquarion and ending on the earlier of (i) the date of Termination of
the consulting relationship between Aquarion and Executive pursuant to
Section 2(b) or Section 4 hereof and (ii) the fifth anniversary of the
commencement of such period (or such later date as the Compensation
Committee of the
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Board, in its sole discretion, shall determine and the Executive may
agree to); provided that, subject to earlier Termination as aforesaid,
the Consulting Period shall consist of the "First Consulting Period"
commencing the day following the date of Executive's Termination of
employment with Aquarion and ending on the first anniversary of such
day and the "Second Consulting Period" comprising the remainder of the
Consulting Period. Notwithstanding the foregoing, the Second
Consulting Period shall not commence, and Executive shall be
Terminated, as of the last day of the First Consulting Period, if the
Compensation Committee of the Board, in its sole discretion, shall so
determine.
(d) 'Employment Agreement" means the employment agreement
dated as of January 1, 1990 between Aquarion (then "The Hydraulic
Company") and Executive.
(e) "Half-time" means the equivalent of approximately 115
working days per calendar year.
(f) "One-fifth time" means the equivalent of
approximately 46 working days per calendar year.
(g) "Permanent and Total Disability" means a disability
that renders (or would render if it occurred at an earlier age) the
Executive eligible to receive disability benefits under Title 11 of
the Social Security Act, as amended from time to time.
(h) "Retirement Plan" means the Amended and Restated
Retirement Plan for Employees of Aquarion Company, as such plan may be
amended from time to time, and any successor to such plan.
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(i) "Supplemental Plan" means the Supplemental Savings and
Retirement Plan of Aquarion Company, as such plan may be amended from
time to time, and any successor to such plan.
(j) "Terminate," "Termination" and correlative terms mean
the termination of Executive's employment or consulting with Aquarion,
including voluntary termination by Executive.
2. Employment and Consulting:
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(a) Executive shall voluntarily resign from the position of
President and Chief Executive Officer of Aquarion and Terminate,
effective as of October 1, 1995, but not prior to such date unless
requested by Executive and consented to by the Board. Between the
date hereof and such Termination, Executive shall perform all duties
pertaining to his office and in accordance with the Employment
Agreement and shall work in cooperation with the Board and his
designated successor (or successors) to the foregoing position to
effect the orderly transition of responsibilities to such successor
(or successors) on such schedule as shall be determined by mutual
agreement. The terms of the Employment Agreement are modified only to
the extent expressly inconsistent with this Agreement, but nothing
contained in this Agreement shall confer upon Executive any additional
right to be retained as President or Chief Executive Officer of
Aquarion or to be retained as an employee of Aquarion in any other
capacity; and from and after October 1, 1995 Executive shall be deemed
to have retired at age 62 for purposes of subsections 4(d)(i)(B) and
4(d)(iv) of the Employment Agreement.
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(b) Upon his Termination as an employee of Aquarion,
Executive shall be retained by Aquarion on a consulting basis for the
Consulting Period. During the Consulting Period, Executive shall be
available to assist Aquarion on a part-time basis (i.e., on a
half-time basis during the First Consulting Period and on a one-fifth
time basis during the Second Consulting Period) with the transition of
responsibilities to his designated successor (or successors) and with
special projects designated by the Board, including, but not limited
to, real estate, acquisitions, industry consolidation efforts,
community relations, economic development activities, legislative and
regulatory relations, and privatization contract management. During
the First Consulting Period, Employer shall pay to Executive
a consulting fee at a rate of $175,000 per year, and during the Second
Consulting Period, Employer shall pay to Executive a consulting fee at
a rate of $75,000 per year; such consulting fees shall be paid in
monthly installments in arrears and shall be subject to reduction on
account of all applicable tax withholding requirements. Retention of
Executive during the Second Consulting Period shall be on a year-to-
year basis, such that the Compensation Committee of the Board, in its
sole discretion and for any reason whatsoever, or Executive, in his
sole discretion and for any reason whatsoever, may determine to
terminate Executive's services as a consultant on any anniversary of
the commencement of the Second Consulting Period. Executive's
consulting services shall also terminate, and payment of the foregoing
consulting fees also shall cease in the event of Executive's death or
his Permanent and Total Disability and are subject to Section 13
hereof.
3. Additional Retirement Benefit: Commencing as of October 1,
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1995, and continuing until the death of Executive, Aquarion shall pay
to Executive as an additional retirement benefit an annual amount
equal to $25,900. Such additional retirement benefit shall be paid in
equal monthly installments on the first day of each month, shall be
subject to reduction on account of all applicable tax withholding
requirements of federal, state or
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municipal laws, shall cease upon the death of Executive, and shall be
subject to Section 13 hereof.
4. Termination for Cause: Aquarion may Terminate Executive's
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employment or consulting at any time for Cause. Upon any such
Termination, the consulting fees provided for in Section 2(b) hereof
shall not continue or commence to be paid.
5. Non-Competition: Confidential Information:
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(a) Executive agrees that for the entire Consulting Period, and
for a period of six months thereafter (one year thereafter if
Executive's consulting with Aquarion is voluntarily terminated by
Executive), Executive shall not, without the written consent of the
Board in each instance, directly or indirectly be or become interested
as a partner, principal, agent, employee, stockholder, officer,
director, trustee, consultant, or in any other capacity whatsoever
(except as a less than 10% owner of stock of a public corporation) in
any water company operating within the State of Connecticut, other
than a company that is owned by or affiliated with Aquarion, nor shall
Executive, directly or indirectly, assist or lend his name to any such
water company, except as such water company may be benefited by
Executive's compensated or uncompensated representation of, or efforts
or advocacy on behalf of, the water supply industry on a local,
regional or national basis; and provided, however, that Executive may,
during the Consulting Period and thereafter, practice law, either
individually or as a member of a law firm, and neither Executive nor
any such law firm shall be proscribed from representing any other
water company in a professional capacity as an attorney-at-law or as a
"lobbyist" (as defined in the Connecticut General Statutes), subject
to the applicable Rules of Professional Conduct for attorneys.
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(b) Executive shall not at any time after the date of
Termination reveal to anyone other than authorized representatives of
Aquarion, or use for his own benefit, any trade secrets, customer
information or other information that has been designated as
confidential by Aquarion or is understood by Executive to be
confidential without the written authorization of the Board in each
instance, unless such information is or becomes available to the
public or is otherwise public knowledge or in the public domain for
reasons other than Executive's acts or omissions.
(c) If Executive breaches any of his obligations under this
Section 5, and such breach constitutes Cause or would constitute Cause
if it occurred prior to the end of the Consulting Period, Aquarion
shall thereafter have no obligation to pay the consulting fees
pursuant to Section 2(b) of this Agreement, but shall remain obligated
for compensation and benefits as provided in any other plans, policies
or practices, including, without limitation, the Retirement Plan, the
Supplemental Plan, and the additional retirement benefit pursuant to
Section 3 of this Agreement, then applicable to Executive in
accordance with the terms thereof. Executive hereby acknowledges that
Aquarion's remedies at law for any breach of his obligations under
this Section 5 would be inadequate. Executive and Aquarion agree
that, in addition to any other remedies provided for herein or
otherwise available at law, temporary and permanent injunctive relief
may be granted in any proceeding which may be properly brought by
Aquarion to enforce the provisions of this Section 5 without the
necessity of proof of actual damages.
6. Taxes: Aquarion may withhold from any amounts payable under
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this Agreement all federal, state, city, or other taxes as Employer is
required to withhold pursuant to any law or government regulation or
ruling. Executive shall bear all expense
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of, and be solely responsible for, all federal, state, local or
foreign taxes due with respect to any payment received hereunder.
7. Successors and Binding Agreement:
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(a) This Agreement shall be binding upon and inure to the
benefit of Aquarion and any successor to Aquarion, including, without
limitation, any persons acquiring directly or indirectly all or
substantially all of the business and/or assets of Aquarion whether by
purchase, merger, consolidation, reorganization, or otherwise (and
such successor shall thereafter be deemed "Aquarion" for the purposes
of this Agreement), but will not otherwise be assignable,
transferable, or delegable by Aquarion. Aquarion shall require any
successor (whether direct or indirect, by purchase, merger,
consolidation, reorganization, or otherwise) to all or substantially
all of the business and/or assets of Aquarion, by agreement in form
and substance satisfactory to Executive, expressly to assume and agree
to perform this agreement in the same manner and to the same extent
Employer would be required to perform if no such succession had taken
place.
(b) This Agreement shall inure to the benefit of and be
enforceable by Executive's personal or legal representatives,
executors, administrators, successors, heirs, distributees, and/or
legatees.
(c) This Agreement is personal in nature and neither of the
parties hereto shall, without the consent of the other, assign,
transfer, or delegate this Agreement or any rights or obligations
hereunder except as expressly provided in Sections 7(a) and 7(b)
hereof. Without limiting the generality or effect of the foregoing,
Executive's rights hereunder shall not be assignable, transferable, or
delegable, whether by pledge, creation of
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a security interest, or otherwise, and any attempted assignment or
transfer contrary to this Section 7(c) shall be null and void.
8. Notices: All communications, including, without limitation,
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notices, consents, requests, or approvals, required or permitted to be
given under this Agreement shall be in writing.
9. Absence of Funding: Additional retirement benefits payable
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to Executive under this Agreement shall be 'unfunded," as that term
is used in Sections 201(2), 301(a)(3), 401(a)(1) and 4021(a)(6) of the
Employee Retirement Income Security Act of 1974, as amended, with
respect to unfunded plans maintained primarily for the purpose of
providing deferred compensation to a select group of management or
highly compensated employees, and Aquarion shall administer this
Agreement in a manner that will ensure that Executive will not be
considered to have received a taxable economic benefit prior to the
time at which such benefits are actually payable. The provisions of
this Agreement for additional retirement benefits constitute a mere
promise of Aquarion to provide such benefits, and Executive's right to
such benefits are not subject in any manner to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance,
attachment, or garnishment by creditors of the Executive or the
Executive's spouse. Accordingly, Aquarion shall not be required to
segregate or earmark any of its assets for the benefit of Executive.
10. Governing Law: The validity, interpretation, construction,
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and performance of this Agreement shall be governed by and construed
in accordance with the substantive laws of the State of Connecticut,
without giving effect to the principles of conflict of laws of such
State, to the extent not preempted by applicable federal law.
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11. Validity: If any provision of this Agreement or the
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application of any provision hereof to any person or circumstances is
held invalid, unenforceable, or otherwise illegal, the remainder of
this Agreement and the application of such provision to any other
person or circumstances shall not be affected, and the provision so
held to be invalid, unenforceable, or otherwise illegal shall be
reformed to the extent (and only to the extent) necessary to make it
enforceable, valid, or legal.
12. Non-Exclusivity of: Nothing in this Agreement shall prevent
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or limit Executive's present or future participation in any benefit,
bonus, incentive, or other plan or program provided by Aquarion for
which Executive has qualified or may qualify, nor shall this Agreement
in any manner limit or otherwise affect such rights as Executive may
have under any stock option or other agreements with Aquarion, and
Executive shall be deemed to have retired at age 62 on the date of
Termination as an employee of Aquarion for purposes of any stock
options and restricted stock and for purposes of eligibility for
benefits, but not for purposes of calculating the amount of benefits
under the Supplemental Plan. Amounts or benefits which are vested or
which Executive is otherwise entitled to receive under any such
agreement or any plan or program of Aquarion at or subsequent to the
date of Termination as an employee of Aquarion, including, without
limitation, the Retirement Plan, the Supplemental Plan and the
additional retirement benefit pursuant to Section 3 of this Agreement,
shall be payable in accordance with such agreements, plan or program
provided, however, that any compensation and benefits received by
Executive pursuant to this Agreement shall be in lieu of (but, if
necessary to give effect to this provision, shall be reduced by) all
compensation and benefits that Executive is entitled to receive or may
become entitled to receive under any reduction-in-force or severance
pay plan or practice that Aquarion now has in effect or may hereafter
put into effect and shall
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be applied toward satisfying any severance pay and benefits required
under federal or state law to be paid or provided to Executive.
13. Release: Retention of Executive as a consultant pursuant to
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Section 2(b) hereof and the payment of additional retirement benefits
pursuant to Section 3 hereof are expressly conditioned upon, and will
not occur in the absence of, the Executive's execution of a release,
in the form attached hereto as Exhibit A, and such release becoming
effective prior to the first day of the Consulting Period.
14. Arbitration: Any dispute arising out of or in any way
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relating to this Agreement or Executive's employment with Aquarion,
including, without limitation, any claims Executive may assert under
the Age Discrimination in Employment Act of 1967, as amended, shall be
resolved by arbitration in Connecticut through the Hartford,
Connecticut office of the American Arbitration Association in
accordance with the Model Employment Arbitration Procedures of the
American Arbitration Association except to the extent such provisions
are modified as hereinafter provided. The arbitration proceeding
shall be conducted by three (3) arbitrators. Executive and Aquarion
shall each designate one (1) arbitrator, each of whom shall be an
attorney admitted to practice in one or more states who has ten (10)
or more years of experience in employment matters, and the arbitrators
so selected shall thereafter designate a third arbitrator (who shall
be a member of the National Academy of Arbitrators) by mutual
agreement. The arbitrators shall have no authority to modify any
provision of this Agreement or to award a remedy for a dispute
involving this Agreement other than a benefit specifically provided
under or by virtue of this Agreement. The decision of the arbitrators
shall be final and binding on Aquarion and Executive. Employer and
Executive shall each pay their own legal fees associated with arbitration
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proceedings hereunder, but the fees of the arbitrators and any other
costs associated with such arbitration proceedings shall be shared
equally by Aquarion and Executive.
15. Miscellaneous: No provision of this Agreement may be
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modified, waived, or discharged unless such waiver, modification, or
discharge is agreed to in a writing signed by Executive and Aquarion.
No waiver by either party hereto at any time of any breach by the
other party hereto or compliance with any condition or provision of
this Agreement to be performed by such other party shall be deemed a
waiver of similar or dissimilar provisions or conditions at the same
or at any prior or subsequent time. No agreements or representations,
oral or otherwise, expressed or implied with respect to the subject
matter hereof have been made by either party which are not set forth
expressly in this Agreement. References to Sections are references to
Sections of this Agreement. Headings are included in this Agreement
for convenience only and are not substantive provisions of this Agreement.
16. Modifications During 120-Day Period: Aquarion and Executive
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agree that, during the, 120-day period beginning on the date hereof,
they shall consider the advisability of providing some or all of the
consideration under this Agreement through split dollar life
insurance, and any mutual decision to use split dollar life insurance
for such purpose shall be reflected in a modification of this Agreement.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
duly executed and delivered as of the date first above written.
AQUARION COMPANY
Date: Sept. 15, 1995 By: /S/XXXXXXX X. XXXXXXXX
___________________________ ___________________________
Its Vice President Administration
& Human Resources
___________________________
Date: 9/27/95 /S/XXXX X. XXXXXXXX
___________________________ ___________________________
Xxxx X. XxXxxxxx
EXHIBIT A
RELEASE
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(a) In consideration of the benefits under the Agreement to which
this Release is an exhibit, Executive releases, waives, and
forever discharges Aquarion, any related companies, and the
employees, officers, representatives, agents and directors of any
of them from all claims, demands, actions, suits, covenants,
contracts, agreements, promises and liabilities of any kind
whatsoever, known or unknown, which Executive, Executive's heirs,
executors or assigns may have had, now have or could in the
future have including, without limitation, those based on
Executive's employment with the Company, or the termination of
that employment. This includes, for example, a release of any
rights or claims Executive may have under the Age Discrimination
in Employment Act, which prohibits age discrimination in
employment; Title VII of the Civil Rights Act of 1964, which
prohibits discrimination in employment based on race, color,
national origin, religion or sex; the Equal Pay Act, which
prohibits paying men and women unequal pay for equal work; or any
other federal, state or local laws or regulations prohibiting
employment discrimination. This also includes a release by
Executive of any claims for wrongful discharge or breach of
employment agreement. This release covers both claims that
Executive knows about and those he may not know about.
(b) This Release does not include, however, a release of Executive's
right, if any, to benefits under Aquarion's pension and profit
sharing plans, whether qualified or non-qualified for federal
income tax purposes, a release of any claim made by Executive
under any welfare benefit plan prior to the signing of said
Agreement, or a release of any rights or claims that Executive
may have under the Age Discrimination in Employment Act which
arise after the date Executive signs this Release. Furthermore,
this Release does not include a release of any rights of
Executive or Executive's heirs, executors, or assigns relating to
enforcement of obligations of Aquarion (i) under the Agreement to
which this Release is an exhibit, or (ii) pertaining to
indemnification of Executive as an officer, director, or employee
of Aquarion.
(c) Executive further promises never to file or join in a lawsuit or
other proceeding asserting any claims that are released in
Section (a) hereof.
(d) By signing this Release, Executive agrees: (i) that Executive has
been advised to consult with an attorney prior to signing this
Release; (ii) that Aquarion's entering into the Agreement to
which this Release is an exhibit constitutes consideration for
this Release, in that such Agreement, in accordance with its
terms, will confer payments and benefits to which Executive would
not have been entitled had Executive not signed this Release;
(iii) that Executive has been given a period of 21 days within
which to consider this Release but that he may sign it in less
than 21 days; and (iv) that this Release is not effective or
enforceable for 7 days after Executive signs it, and Executive
may revoke it during that period.
/S/XXXX X. XXXXXXXX
___________________________
Executive
Date: 9/27/95
___________________________
