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EMPLOYMENT AGREEMENT
This Employment Agreement, dated as of October 1, 1998, between
BIRMINGHAM UTILITIES, INC. (the "Company"), a Connecticut corporation
with its principal offices in Ansonia, Connecticut, and JOHN S. TOMAC
of Stratford, Connecticut ("Executive").
RECITALS
The Company desires to retain the services of Executive as
President of the Company, and Executive is willing to be employed by
the Company on the terms and conditions set forth herein.
NOW, THEREFORE, the parties agree as follows:
1. Term of Employment. The Company agrees to employ Executive, and
Executive agrees to accept employment with the Company, for a term
commencing on October 1, 1998 and continuing for a period of three (3)
years, unless sooner terminated as provided in this Agreement. Unless
written notice shall have been given to Executive by the Company, or to
the Company by Executive, that this Agreement will no longer be
automatically extended, the term of employment (the "Employment Period")
shall automatically be extended on the first day of each succeeding
calendar month to end three years from each such date of extension,
without further action by the parties. For example, absent prior notice
of no further automatic renewal, on November 1, 1998 this Agreement
will automatically be extended for a new three year term ending on
October 31, 2001.
2. Duties.
a. During the Employment Period, the Company shall employ Executive
as the President of the Company and of any successors to the Company's
water supply business, and Executive shall perform, in Ansonia,
Connecticut or its general environs, the duties and exercise the powers
relating to the office of President of the Company or any successors to
the Company's water supply business and shall have full responsibility
and authority for the direction and management of those business
operations of the Company and its successors.
b. During the Employment Period, Executive shall devote
substantially all of his business time, best efforts and ability to the
business of the Company.
c. The failure of the Company or its successors to allow the
Executive to perform the functions and duties, and exercise the
authority and responsibility required, of his office shall be deemed to
be a breach of this Agreement by the Company or its successors, as
applicable.
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3. Compensation and Benefits.
a. Base Salary. The Company shall pay Executive as compensation for
his services during the first year of the Employment Period a Base
Salary at an annual rate of One Hundred Thousand Dollars ($100,000.00).
Executive's Base Salary for each successive twelve (12) month period
during the Employment Period shall be reviewed by the Company's Board
of Directors but shall not, in any event, be less than the initial Base
Salary of $100,000.00. Salary payments shall be made in equal
increments consistent with the Company's standard payroll practices
for its officers.
b. Automobile. In addition to the Base Salary set forth in
subsection 3(a) above, the Company shall provide Executive with an
automobile of equivalent value to that currently provided to the
Executive, available for use twenty-four (24) hours per day, seven (7)
days per week, and shall pay all expenses in connection with the
operation of the vehicle, including without limitation all fuel expenses
for such use.
c. Expenses and Facilities. Upon submission of appropriate invoices
or vouchers, the Company shall pay or reimburse Executive for all
reasonable expenses incurred by Executive in the performance of his
duties under this Agreement. The Company shall provide the Executive
with an office and secretarial facilities required in the performance
of his duties.
d. Vacation. Executive shall be entitled to four (4) weeks paid
vacation each contract year, to be taken each year at a time or times
as shall be mutually agreed upon by the Company and Executive.
e. Benefits. At all times during the Employment Period, Executive
shall be entitled to and shall be included in any employee welfare
and retirement plan or program of the Company available generally to
its employees and/or officers including, without limitation,
hospital/medical/dental benefits (including without limitation such
benefits during retirement), retirement benefits, savings plans, sick
pay, and any other plans generally available to employees and/or
officers of the Company.
4. Termination.
a. Termination by Death. If Executive dies during the Employment
Period, the Company's obligations under this Agreement shall terminate
three (3) months from the date of death, and Executive's estate shall be
entitled to all arrearages of salary and expenses but shall not be
entitled to further compensation.
b. Termination by Mutual Agreement. This Agreement may be
terminated at any time by mutual agreement of the Company and Executive.
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c. Termination upon Breach by Company. This Agreement may be
terminated by the Executive at his option in the event of a breach
hereof by the Company. In the event of such termination, Executive
shall continue to receive all of the compensation and benefits
enumerated in Section 3 hereof as if no breach had occurred.
d. Termination For Cause. If the Executive's employment is
terminated by the Company for Cause (as defined below) prior to the
expiration of the Employment Period, the Executive shall immediately
forfeit the right to receive any further payments of Base Salary and
benefits, except as may be required by law. "Cause" shall include (i)
the Executive's conviction in a court of law of any crime or offense
involving misuse or misappropriation of money or other property of the
Employer, or (ii) the Executive's continued or repeated willful
failure, or the Executive's refusal, to perform his obligations
under this Agreement, and such failure or refusal is not remedied by
the Executive within thirty (30) days after notice, or (iii) any
flagrant act of dishonesty or disloyalty by the Executive or any act
involving gross moral turpitude of the Executive, which act materially
adversely affects the business of the Company.
e. Termination At Option of Employer. Except in the event of a
Change of Control as set forth in paragraph 4 (g) below, during the
period from October 1, 2000 through March 31, 2001, and during
successive six month periods, each commencing two years and six months
from the end of the preceding period (for example, October 1, 2003
through March 31, 2004 and October 1, 2006 through March 31, 2007),
the Employer may terminate the Executive's employment under this
Agreement without Cause, and upon termination under this Section 4 (e),
the Executive shall be entitled to Base Salary plus continued Benefits
(both as in effect at the time of such termination) for a period of
one year from the date of such termination as severance pay.
f. Disability. If the Executive becomes totally disabled (as
defined below) during the term of the Employment Period, the Company
may terminate the employment of the Executive under this Agreement.
If the employment of the Executive hereunder is so terminated, the
Executive shall receive the same payments he would have been entitled
to receive under Section 4(a) above as if death had occurred on the
date of the total disability. For purposes of this Section, the
Executive shall be deemed "totally disabled" when, and only when, (i)
in the reasonable judgment of the Board of Directors of the Company,
he is unable to perform the services required under this Agreement
because of a medically determinable physical or mental disability and
(ii) such inability has lasted for a period of not less than six
continuous months.
g. Termination after Change of Control. Notwithstanding any other
provision hereof, should a Change of Control (as defined below) occur
during his term of employment, Executive may, upon such Change of
Control, elect to terminate this Agreement and receive a lump sum cash
payment equal to two (2) times the greater of the following: (A)
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Executive's compensation (the "Compensation") from the Company for
services rendered for the last full fiscal year immediately preceding
the election or (B) Executive's average annual Compensation with respect
to the two (2) most recent fiscal years ending before such election.
Compensation as described above shall include all Base Salary, bonus and
other cash incentive payments to Executive for services rendered for the
time period in question. Payment of this severance shall be paid in
full within 90 days following the election and shall not be reduced by
any compensation which the Executive may receive from the Company or
from other employment with another employer should Executive's
employment with the Company terminate. In the event that Executive does
not elect to terminate this Agreement after a Change of Control as set
forth in the preceding sentence, this Agreement shall continue for a
period of three years from such Change of Control, and shall terminate
at the end of such three year period, provided that should the Company,
during the first two years after such Change of Control, modify
Executive's conditions of employment, including but not limited to
compensation, title, duties and responsibilities, Executive may
terminate this Agreement and shall be entitled to receive the Base
Salary plus continued Benefits (both as in effect at the time of such
termination) for the remainder of the three year period.
For purposes of this Agreement, a "Change of Control" shall mean:
(i) a merger, acquisition, consolidation, sale of assets or other
reorganization to which the Company is a party, as a consequence of
which members of the Company's Board of Directors in office immediately
prior to such transaction constitute less than a majority of the
appropriate Board of Directors immediately thereafter; (ii) a proxy
contest to which the Company is a party, as a consequence of which
members of the Company's Board of Directors in office immediately prior
to such event constitute less than a majority of the Board of Directors
thereafter; (iii) an event or events occurring after the Effective Date
hereof as a result of which any Person (as hereinafter defined) is or
becomes the Beneficial Owner (as hereinafter defined), directly or
indirectly, of 50% or more of the combined voting power of the
Company's then outstanding securities without the prior approval of at
least two-thirds of the members of the Company's Board of Directors in
office immediately prior to such Person attaining such percentage
interest. "Person" shall have the meaning of such term as used in
Sections 13(d) and 14(d) of the Securities Exchange Act of 1934 (the
"Act"). "Beneficial Owner" shall have the definition of such term as
defined in Rule 1 3d-3 under the Act.5. Indemnification. The Company
will indemnify the Executive (and his legal representatives or other
successors) to the fullest extent permitted by the laws of the State of
Connecticut that are in effect at the time of the subject act or
omission, or by the Certificate of Incorporation and By-Laws of the
Company as in effect at such time or on the effective date of this
Agreement, whichever affords or afforded greater protection to the
Executive (including payment of expenses in advance of final disposition
of a proceeding) against all costs, charges and expenses whatsoever
incurred or sustained by him or his legal representatives in connection
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with any action, suit or proceeding to which he (or is legal
representatives or other successors) may be made a party by reason of
his being or having been a director, officer or employee of the
Company or his serving or having served any other enterprise as a
director, officer or employee at the request of the Company.
Furthermore, the Executive shall be entitled to the protection of any
insurance policies the Company may elect to maintain generally for
the benefit of its directors and officers with respect to such costs,
charges and expenses.
6. General Provisions.
a. All notices required by this Agreement shall be in writing and
shall be sufficiently given if delivered or mailed by registered or
certified mail, return receipt requested, to the parties at their
respective addresses set forth below. Any party may specify a different
address by written notice to the other, in accordance with this Section.
All notices shall be deemed to have been given as of the date so
delivered or mailed
to the Company:
Birmingham Utilities, Inc.
230 Beaver Street
Ansonia, Connecticut 06401
Attention: Chairman
and a copy to:
Robert J. Metzler, II
Tyler Cooper & Alcorn, LLP
CityPlace, 35th Floor
Hartford, Connecticut 06103-3488
to Executive:
John S. Tomac
175 Twin Oaks Terrace
Stratford, Connecticut 06614
b. This Agreement contains the entire agreement between the parties
as to the employment of Executive by the Company, and there are no other
representations, warranties, conditions or agreements relating to the
subject matter of this Agreement.
c. The waiver by any party of any breach or default of any provision
of this Agreement shall not operate or be construed as a waiver of any
subsequent breach.
d. This Agreement may be changed orally but only by an agreement in
writing duly executed on behalf of the party against which enforcement
of any waiver, change, modification, consent or discharge is sought.
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e. This Agreement shall be binding upon and inure to the benefit of
the Company and Executive and their respective successors, assigns,
heirs and legal representatives. This Agreement shall not be assigned
by either party.
f. Each of the parties agrees to execute all further instruments
and documents and to take all further action as the other party may
reasonably request in order to effectuate the terms and purposes of this
Agreement.
g. This Agreement may be executed in one or more counterparts, all
of which taken together shall constitute one and the same instrument.
h. This Agreement shall be construed pursuant to and in accordance
with the laws of the State of Connecticut.
i. Wherever used in this Agreement, the masculine, feminine and
neuter pronouns shall be fully interchangeable, and the singular shall
include the plural where the context so requires and vice versa.
j. If any term or provision of this Agreement is held or deemed to
be invalid or unenforceable, in whole or in part, by a court of
competent jurisdiction, such term or provision shall be ineffective to
the extent of such invalidity or unenforceability without rendering
invalid or unenforceable the remaining terms and provisions of this
Agreement.
k. If Executive must, in the exercise of his sole discretion,
bring legal action against the Company or its successors, as applicable,
in order to recover damages or to enforce his rights under this
Agreement, or both, Executive shall be reimbursed by the Company or its
successor, as applicable, his reasonable expenses, including without
limitation, legal fees and disbursements, if he prevails in such action,
either partially or wholly.
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first above written.
BIRMINGHAM UTILITIES, INC.
By: /s/ Betsy Henley-Cohn
Betsy Henley-Cohn, Chairwoman
EXECUTIVE
By: /s/ John S. Tomac
John S. Tomac