Exhibit 10(c)
EXECUTIVE AGREEMENT
AGREEMENT made effective as of the ____ day of December, 1999 between
BANGOR HYDRO-ELECTRIC COMPANY, a Maine corporation (the "Company"), and
__________________ (the "Executive").
WHEREAS, the Executive is presently employed by the Company as
__________________________; and
WHEREAS, the Board of Directors of the Company (the "Board")
recognizes that the Executive's contribution to the growth and success of the
Company has been substantial, and the Board desires to reinforce and
encourage the continued attention and dedication to the Company of the
Executive as a member of the Company's management, in the best interests of
the Company and its shareholders; and
WHEREAS, in order to effect the foregoing, the Company and the Executive
wish to enter into an agreement setting forth the severance compensation
which will be provided if the Executive's employment terminates under certain
circumstances subsequent to a "change of control of the Company," as
hereinafter defined; and
WHEREAS, the Company and the Executive are parties to an existing
executive agreement which the parties intend to replace in its entirety with
this Agreement;
NOW, THEREFORE, in consideration of the premises and the respective
covenants and agreements of the parties herein contained, and intending to be
legally bound hereby, the parties hereto agree as follows:
1. Position and Duties
The Executive shall have such responsibilities and authority as may from
time-to-time be assigned to the Executive by the Board or the President of
the Company.
2. Termination
The Executive's employment hereunder may be terminated at any time by
the Company or Executive without any breach of this Agreement. Any
termination by the Company or the Executive shall be communicated by a
written notice to the other party, and for purposes of this agreement, the
"date of termination" shall be the date specified in the notice of
termination.
3. Change of Control
For purposes of this Agreement, a "change in control of the Company"
shall mean (i) approval by the stockholders of the Company of a
reorganization, merger, consolidation (in each case with respect to which
such stockholders do not, immediately thereafter, own more than 50% of the
combined voting power of the reorganized, merged or consolidated company's
then-outstanding voting securities) or a liquidation or dissolution of the
Company or the sale of all or substantially all of the assets of the Company;
(ii) the occasion upon which any "person" (as such term is sued in
Sections 13(d) and 14(d) of the Securities Exchange Act of 1934 (the
"Exchange Act")), other than the Company or any person who on the date
hereof is a director or office of the Company, is or becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Company representing 20% or more of the
combined voting power of the Company's then outstanding securities, or
(iii) the occasion upon which, during any period of two consecutive years
during the term of this Agreement, individuals who at the beginning of such
period constitute the Board cease for any reason to constitute at least a
majority thereof, unless the election of each director who was not a director
at the beginning of such period has been approved in advance by directors
representing at least two-thirds of the directors then in office who were
directors at the beginning of the period.
4. Willful Misconduct
For purposes of this agreement, "willful misconduct" shall mean only
fraud, theft, or embezzlement on the part of the Executive. Notwithstanding
the foregoing, the Executive shall not be deemed to have been terminated for
willful misconduct unless and until there shall have been delivered to the
Executive a copy of a resolution duly adopted by the affirmative vote of not
less than three-quarters of the entire membership of the Board at a meeting
of the Board called and held for the purpose after reasonable notice to the
Executive and opportunity for the Executive, together with Executive's
counsel, to be heard before the Board, finding that in the good faith opinion
of the Board the Executive was guilty of the willful misconduct as defined in
this Agreement, and specifying the particulars thereof in detail.
5. Termination Following Change in Control
(a) In the event that, within one year following a change in control of
the Company, the Executive's employment with the Company terminates,
voluntarily (including by early retirement pursuant to the provisions of the
Company's qualified defined benefit pension plan or any supplemental benefit
plan maintained by the Company applicable to the Executive) or involuntarily,
other than by reason of Executive's death, disability as defined in the
Company's disability plan, willful misconduct as defined herein, or
retirement (other than early retirement) under the Company's qualified
defined benefit pension plan, the Company shall pay as severance pay to the
Executive, an amount equal to two (2) times the average of the aggregate
annual compensation paid to the Executive by the Company during the three
calendar years preceding the date of termination. For this purpose,
"aggregate annual compensation" shall mean the Executive's base salary plus
any bonuses earned for the year in question pursuant to Company short-term or
long-term bonus incentive programs.
In addition, for two (2) years after the date of termination, the
Company will maintain for the Executive's benefit the same or substantially
equivalent health, disability and life insurance coverage as were applicable
to the Executive and his eligible dependents prior to the date of
termination. Following such two (2) year period, the Company shall provide
to the Executive and his eligible dependents the retiree group health
insurance coverage that is otherwise available to retirees of the Company, at
a cost to the Executive at the time coverage is provided that is no greater
than the cost to a retiree at that time with the same years of service as the
Executive; provided, however, that if the Executive was not eligible for
early retirement under the Company's qualified defined benefit pension plan
at the time of his termination of employment, such retiree coverage shall not
commence until the later of the Executive's attainment of age 55 or two (2)
years after his date of termination.
(b) The severance payment shall be made in a lump sum payment within
thirty (30) days following the date of termination, unless the Executive has,
at least twelve (12) months prior to the Date of Termination, elected to
receive the payment in installments. Such election shall be in writing,
addressed to the Company in the manner provided for the giving of notice
pursuant to this Agreement. If the Executive has elected to receive the
payment in installments, such payment shall be made in two equal
installments, with the first installment payable within thirty (30) days
following the date of termination. All payments shall be subject to
applicable deduction of federal and state taxes.
(c) The Executive's benefits under this section shall be considered
severance pay in consideration of his past service and in consideration of
his continued service from the date of this Agreement. The Executive shall
not be required to mitigate the amount of any payment provided herein by
seeking other employment or otherwise, nor shall the amount of any payment or
benefit provided herein be reduced by any compensation earned by the
Executive as the result of other employment after the date of termination, or
otherwise.
(d) Executive's participation in any terminating distributions and
vested rights under any applicable Company pension plan, profit sharing plan,
life insurance or stock option plan shall be determined as of the date of
termination and shall be in addition to the rights hereunder and shall be
governed by the terms of those respective plans. Except as may be provided
in any such plan, the arrangements provided by this Agreement shall
constitute full settlement and satisfaction of any claim the Executive might
otherwise have against the Company or account of termination of his
employment.
6. Additional Payments By the Company
(a) Anything to the contrary in this Agreement notwithstanding, if any
payment by the Company to or for the benefit of the Executive (whether paid
or payable pursuant to this Agreement or otherwise, and determined without
regard to any additional payments required under this Section 6) (a
"Payment") would be subject to the excise tax imposed by Section 4999 of
the Internal Revenue Code of 1986, as amended (the "Code"), or any interest
or penalties are incurred by the Executive with respect to such excise tax
(such excise tax, together with any such interest and penalties, are
hereinafter collectively referred to as the "Excise Tax"), then the
Executive shall be entitled to receive an additional payment (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, without limitation, any income taxes (and any interest or
penalties imposed with respect thereto) and 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.
(b) Subject to the provisions of Section 6(c), all determinations
required to be made under this Section 6, including whether and when a Gross-
Up Payment is required and the amount of such Gross-Up Payment and the
assumptions to be utilized in arriving at such determination, shall be made
by one of the major internationally recognized certified public accounting
firms designated by the Executive and approved by the Company (which approval
shall not be unreasonably withheld) (the "Accounting Firm"). The
Accounting Firm shall provide detailed supporting calculations both to the
Company and the Executive within fifteen (15) business days of the receipt of
notice from the Executive that there has been a Payment, or such earlier time
as is requested by the Company. All fees and expenses of the Accounting Firm
shall be borne solely by the Company. Any Gross-Up Payment, as determined
pursuant to this Section 6, shall be paid by the Company to the Executive
within five (5) days of the receipt of the Accounting Firm's determination.
Any determination by the Accounting Firm shall be binding upon the Company
and the Executive. As a result of the uncertainty in the application of
Section 4999 of the Code at the time of the initial determination by the
Accounting Firm hereunder, it is possible that Gross-Up Payments which will
not have been made by the Company should have been made ("Underpayment"),
consistent with the calculations required to be made hereunder. In the event
that the Company exhausts its remedies pursuant to Section 6(c) and the
Executive thereafter is required to make a payment of any Excise Tax, the
Accounting Firm shall determine the amount of the Underpayment that has
occurred and any such Underpayment shall be promptly paid by the Company to
or for the benefit of the Executive.
(c) The Executive shall notify the Company in writing of any claim by
the Internal Revenue Service that, if successful, would require the payment
by the Company of the Gross-Up Payment. Such notification shall be given as
soon as practicable but no later than ten (10) business days after the
Executive is informed in writing of such claim and shall apprise the Company
of the nature of the 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 he 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,
(iii) cooperate with the Company in good faith in order
effectively to 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
expenses (including additional interest and penalties) incurred in connection
with such contest and shall indemnify and hold the Executive harmless, on an
after-tax basis, for any Excise Tax or income tax (including interest and
penalties with respect thereto) imposed as a result of such representation
and payment of costs and expenses. Without limitation on the foregoing
provisions of this Section 6(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 sue
for a refund or to 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 such claim and sue 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 income tax
(including interest or penalties with respect thereto) imposed with respect
to such advance or with respect to any imputed income with respect to such
advance; and further provided that any extension of the statute of
limitations relating to payment of taxes for the taxable year of the
Executive with respect to which such contested amount is claimed to be due is
limited solely to such contested amount. Furthermore, the Company's control
of the contest shall be limited to issues with respect to which a Gross-Up
Payment would be payable hereunder and the Executive shall be entitled to
settle or contest, as the case may be, any other issue raised by the Internal
Revenue Service or any other taxing authority.
(d) If, after receipt by the Executive of an amount advanced by the
Company pursuant to Section 6(c), the Executive becomes entitled to receive
any refund with respect to such claim, the Executive shall (subject to the
Company's complying with the requirements of Section 6(c)) promptly pay to
the Company the amount of such refund (together with any interest paid or
credited thereon after taxes applicable thereto). If, after the receipt by
the Executive of an amount advanced by the Company pursuant to Section 6(c),
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 such denial of refund prior to
the expiration of thirty (30) days after such determination, then such
advance shall be forgiven and shall not be required to be repaid and the
amount of such advance shall offset, to the extent thereof, the amount of the
Gross-Up Payment required to be paid.
(e) If in connection with a change in control of the Company the
Company has established an irrevocable "rabbi trust" for the purpose of
funding the benefits provided under a supplemental benefit agreement with the
Executive, and subsequently the amounts deposited and held in such trust are
determined by the Internal Revenue Service to be retroactively taxable to the
Executive without regard to whether any distributions to the Executive or his
spouse have occurred, then any interest and penalties, but not income taxes,
incurred by the Executive as a result of such retroactive determination shall
be considered an "Excise Tax" for purposes of this Section 6 and the
Executive shall be entitled to receive a Gross-Up Payment with respect to
such amounts subject to compliance with the requirements of this Section 6.
7. Successors: Binding Agreement
(a) The Company will require any successor (whether direct or indirect,
by purchase, merger, consolidation or otherwise) to all or substantially all
of the business and/or assets of the Company, by agreement in form and
substance satisfactory to the Executive, to expressly assume and agree to
perform this Agreement in the same manner and to the 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 breach of this Agreement and shall entitle the
Executive to compensation from the Company in the same amount and on the same
terms as he would be entitled to hereunder if he terminated his employment
following a change in control of the Company, except that for purposes of
implementing the foregoing, the date as of which any such succession becomes
effective shall be deemed the date of termination. As used in this
Agreement, "Company" shall mean the Company as heretofore defined and any
successor to its business and/or assets which expressly assumes this
Agreement as required by this Section 7 or which otherwise become bound by
all of the terms and provisions of this Agreement by operation of laws.
(b) This Agreement and all rights of the Executive hereunder shall inure
to the benefit of and be enforceable by the Executive's personal or legal
representative, executors, administrators, successors, heirs, distributees,
devisees and legatees. If the Executive should die while any amounts would
still be payable to him hereunder if he 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 devisee, legatee, or other
designee or, if there is no such designee, to the Executive's estate.
8. Notice
For the purposes of this Agreement, notices, demands and all other
communication provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered or (unless otherwise specified)
mailed by United States registered mail, return receipt requested, postage
prepaid, addressed as follows:
If to the Executive:
______________________
BANGOR HYDRO-ELECTRIC COMPANY
33 State Street
Bangor, ME 04402-0932
If to the Company:
BANGOR HYDRO-ELECTRIC COMPANY
Attention: General Counsel
33 State Street
Bangor, ME 04402-0932
or to such other address as any party may have furnished to the other in
writing in accordance herewith, except that notices of change of addresses
shall be effective only upon receipt.
9. Miscellaneous
No provisions of this Agreement may be modified, waived or discharged
unless such waiver, modification or discharge is agreed to in writing signed
by the Executive and either a more senior executive officer of the Company or
by the Chairman of the Compensation Committee of the Company's Board of
Directors. No waiver by either party hereto at any time of any breach by the
other party hereto of, 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,
express or implied, with respect to the subject matter hereof have been made
by either party which are not set forth expressly in this Agreement. This
Agreement shall not supersede or in any way limit any rights, duties, or
obligations the Executive may have under any Company employee benefit plan or
any other written agreement with the Company, other than the previous
executive agreement between the Company and the Executive which is hereby
replaced and superceded in its entirety by this Agreement. The validity,
interpretation, construction and performance of this Agreement shall be
governed by the laws of the State of Maine.
10. Validity
The invalidity or unenforceability of any provision or provisions of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.
11. Counterparts
This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original but all of which together will
constitute one and the same instrument.
12. Arbitration
Any dispute or controversy arising under or in connection with this
Agreement shall be settled exclusively by arbitration, conducted before a
panel of three arbitrators, in Maine, in accordance with the rules of the
American Arbitration Association then in effect. Judgement may be entered on
the arbitrator's award in any court having jurisdiction. The expense of such
arbitration shall be borne by the Company
IN WITNESS WHEREOF, the parties have executed this Agreement on the date
and year first above written.
BANGOR HYDRO-ELECTRIC COMPANY
By
_____________________, Chairman of the
Compensation Committee of the
Board of Directors
Name