EXHIBIT 10.15
EMPLOYMENT AGREEMENT
THIS AGREEMENT, made as of the 1st day of May, 2001 between
United Capital Investments, Inc. (UCI), organized under the laws of the
State of Connecticut (the "Company") and Richard J. Nicholas, an individual
(the "Officer"),
WITNESSETH THAT:
WHEREAS, the Company desires to employ the Officer as Vice President
and Chief Operating Officer of the Company, and the Officer desires to be
employed by the Company as its Vice President and Chief Operating Officer,
NOW THEREFORE, in consideration of the foregoing and the respective
covenants and agreements of the parties herein contained, and the services to be
rendered to the Company pursuant hereto, and in order to provide an incentive to
the Officer to remain in the employ of the Company hereafter and, in particular,
in the event of any Change in Control (as herein defined), thereby establishing
and preserving continuity of management, the Parties hereby agree as follows:
(1) EMPLOYMENT
The Company hereby agrees to employ the Officer, and the
Officer hereby agrees to serve the Company, at the pleasure of the Board of
Directors of the Company, all upon the terms and conditions set forth herein.
(2) POSITION AND DUTIES
The Officer shall be employed by the Company as its Vice President and
Chief Operating Officer, or in such other equivalent or higher officership
position as the Company's Board of Directors may determine. The Officer shall
accept such employment and shall perform and discharge, faithfully, diligently
and to the best of the Officer's abilities, the duties and obligations of the
Officer's office and such other duties as may from time to time be assigned to
the Officer by, or at the direction of, the Board of Directors of the Company,
and shall devote substantially all of the Officer's working time and efforts to
the business and affairs of the Company. Although a Change in Control (as herein
defined) of the Company shall not affect the obligations of such Company and the
Officer as set forth in the two preceding sentences, at and after the date of
any Change in Control such Company's employment of the Officer
shall also be without diminishment in the Officer's management responsibilities,
duties or powers.
(3) PLACE OF PERFORMANCE
In his employment by the Company, the Officer shall be based within a
fifty-mile radius of the executive offices of the Company in New Haven,
Connecticut.
(4) COMPENSATION
(a) Base Salary. During the term of the Officer's employment
hereunder, the Officer shall receive a base salary (Base Salary) at an annual
rate of One hundred-forty thousand Dollars ($140,000). The Officer's Base Salary
rate shall be reviewed by the Board of Directors of the Company
contemporaneously with each review of the salary rates of the Company's other
officers by said Board of Directors, and may be revised upwards as a result of
any such review. The Officer's Base Salary may be revised downwards by said
Board of Directors contemporaneously with any general reduction of the salary
rates of the Company's other officers.
(b) Incentive Compensation. During the term of the Officer's
employment hereunder, (i) the Officer shall be entitled to an annual incentive
compensation payment equal to seven and one-half percent (7.5%) of his Base
Salary for the achievement of threshold (25%) performance goals formulated by
the Board of Directors, or thirty percent (30%) of his Base Salary for the
achievement of target (100%) performance goals formulated by the Board of
Directors; (ii) the Officer shall be entitled to a compensation arrangement,
which will be a phantom equity share agreement having a potential value to the
Officer targeted at thirty percent (30%) of his Base Salary; and (iii) the
Officer shall be eligible to be designated by the Board of Directors of the
Company as a participant in each other incentive compensation program
established for all officers of the Company. For purposes of this Agreement,
Total Compensation is defined as the sum of the Officer's Base Salary and any
amount paid or payable pursuant to subsection (i) of this section (4)(b).
(c) Business Expenses. During the term of the Officer's
employment hereunder, the Officer shall be entitled to receive prompt
reimbursement for all reasonable expenses incurred by the Officer (in accordance
with the policies and procedures established by the Board of Directors of the
Company from time to time for all of the Company's officers) in performing
services hereunder, provided that the Officer properly accounts therefor.
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(d) Benefit Programs. During the term of the Officer's
employment hereunder, the Officer shall be entitled to participate in and
receive full benefits under all of the Company's employee benefit plans,
programs and arrangements for its officers, including, without limitation, its
retirement and pension plan programs. Nothing paid to the Officer under any such
plan, program or arrangement presently in effect or made available by the
Company in the future shall be deemed to be in lieu of compensation to the
Officer under any other Section of this Agreement.
(e) Vacations and Holidays. During the term of the Officer's
employment hereunder, the Officer shall be entitled to a maximum of 5 weeks paid
vacation in each calendar year as determined by the Board of Directors of the
Company and shall also be entitled to all paid holidays afforded by the Company
to its employees.
(5) TERMINATION
(a) The Officer's employment hereunder shall terminate upon
the Officer's death.
(b) The Board of Directors of the Company may terminate the
Officer's employment hereunder at any time, with or without Cause. Prior to the
date of a Change in Control, the Company shall be deemed to have Cause to
terminate the Officer's employment hereunder only upon the Officer's (A)
continued failure to perform and discharge the duties or obligations of the
Officer's office, or such other duties as may from time to time be assigned to
the Officer by, or at the direction of, the Board of Directors, faithfully,
diligently and to the best of the Officer's abilities, or (B) misconduct that is
injurious to the Company, or (C) conviction of a felony involving the personal
dishonesty or moral turpitude of the Officer, or (D) total and permanent
physical or mental disability, or (E) absence from work on a full-time basis,
due to physical or mental illness, for an uninterrupted 365-day period. On and
after the date of a Change in Control, the Company shall be deemed to have Cause
to terminate the Officer's employment hereunder only upon the Officer's (F)
conviction of a felony involving the personal dishonesty or moral turpitude of
the Officer, or (G) total and permanent physical or mental disability, or (H)
absence from work on a full-time basis, due to physical or mental illness, for
an uninterrupted 365-day period.
(c) The Officer may terminate the Officer's employment
hereunder, upon at least thirty (30) days' prior Notice of Termination delivered
to the Company, for failure of the Company
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to observe and perform one or more of its obligations under Sections (1), (2),
(3) and/or (4) hereof, which failure such Company fails to remedy within such
notice period (a Breach by the Company) at a time when the Officer is not in
default of any of the Officer's obligations under Sections (1) and/or (2)
hereof. The Officer may terminate his employment hereunder in the absence of a
Breach by the Company, effective upon at least six (6) months' prior Notice of
Termination delivered to the Company.
(d) Notice of Termination. Any termination of employment, by
the Company or by the Officer, shall be communicated by delivery of a written
Notice of Termination to the other party.
(e) Date of Termination. For purposes of this Agreement, the
Date of Termination is defined as: if the Officer's employment is terminated (A)
by his death, the date of his death, or (B) pursuant to Section (5)(b) or
Section (5)(c) hereof, the date specified in the Notice of Termination.
(6) CONSEQUENCES OF TERMINATION
(a) If the Officer's employment terminates by reason of the
Officer's death, the Company shall pay to the personal representative and/or
spouse of the Officer the Officer's Total Compensation earned prior to the Date
of Termination, any sums payable under any incentive compensation program
referenced in Subsection (4)(b)(iii) hereof, any amounts payable pursuant to
Sections (4)(c) and (4)(d) hereof and any benefits or amounts payable on account
of the Officer's exercise of his phantom equity share rights under his long-term
incentive compensation arrangement phantom equity share agreement and/or under
any deferred compensation plan in which the Officer had been a participant, and
the Company shall have no further obligation under this Agreement.
(b) If the Officer terminates the Officer's employment
hereunder in the absence of a Breach by the Company and upon at least six (6)
months' prior Notice of Termination, the Company shall pay to the Officer and/or
the Officer's personal representative and/or spouse the Officer's Total
Compensation earned prior to the Date of Termination, any sums payable under any
incentive compensation program referenced in Subsection (4)(b)(iii) hereof, any
amounts payable pursuant to Sections (4)(c) and (4)(d) hereof and any benefits
or amounts payable on account of the Officer's exercise of his phantom equity
share rights under his long-term incentive compensation arrangement phantom
equity share agreement and/or under any deferred compensation plan in which the
Officer had been a participant,
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and the Company shall have no further obligation to the Officer and/or the
Officer's personal representative and/or spouse under this Agreement or on
account of, or arising out of, the termination of the Officer's employment.
(c) If the Company terminates the Officer's employment
hereunder with Cause, or if the Officer terminates the Officer's employment
hereunder in the absence of a Breach by the Company and upon less than six (6)
months' prior Notice of Termination, the Company shall pay to the Officer the
Officer's full Base Salary earned prior to the Date of Termination, any sums
payable under any incentive compensation program referenced in Subsection
(4)(b)(iii) hereof, any amounts payable pursuant to Sections (4)(c) and (4)(d)
hereof and any benefits or amounts payable under any deferred compensation plan
in which the Officer had been a participant, and, provided that the Company are
not in default of any of its obligations hereunder, the Company shall have no
further obligation to the Officer under this Agreement or on account of, or
arising out of, the termination of the Officer's employment.
(d) If the Company terminates the Officer's employment
hereunder without Cause, or if the Officer terminates the Officer's employment
hereunder on account of a Breach by the Company:
(i) The Company shall pay to the Officer the
Officer's Total Compensation earned prior to the Date of Termination, any sums
payable under any incentive compensation program referenced in Subsection (4)(b)
(iii) hereof, any amounts payable pursuant to Sections 4(c) and 4(d) hereof and
any benefits or amounts payable, on account of the Officer's exercise of his
phantom equity share rights under his long-term incentive compensation
arrangement phantom equity share agreement and/or under any deferred
compensation plan in which the Officer had been a participant.
(ii) The Company shall pay to the Officer an
immediate lump sum amount equal to: (A) the sum of the Officer's Annual Base
Salary at the rate fixed by the Board of Directors of the Company as a result
of their most recent review of salary rates pursuant to Section (4)(a) hereof,
plus the annual incentive compensation payment the Officer would earn under
Subsection (4)(b)(i) hereof, assuming that all of the Officer's performance
goals for the annual period are achieved at targeted levels, and (B) any sums
payable under any other incentive compensation program referenced in Subsection
(4)(b)(iii) hereof.
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(iii) The payment to, and acceptance by, the Officer
of any sum of money or benefit prescribed in this Section (6)(d) shall effect
and evidence a release by the Officer of any and all claims against the Company
on account of, or arising out of, the termination of the Officer's employment.
(7) CHANGE IN CONTROL
For purposes of this Agreement, "Change in Control" means any
transaction or series of transactions (other than a transaction or series of
transactions to which only one or both of the Company and one or more of UIL
Holdings Corporation and the direct and indirect wholly-owned subsidiaries of
UIL Holdings Corporation are parties) pursuant to which the Company becomes a
directly wholly-owned subsidiary of another corporation, or is merged or
consolidated with or into such a corporation, or comes under the operational
control and direction of a joint venture, or substantially all of the assets or
more than 50% of the outstanding voting stock of the Company is sold to or
acquired by such a corporation or by another person or group of associated
persons acting in concert.
(8) ADDITIONAL CONSEQUENCES OF A CHANGE IN CONTROL
(a) In the event that a Change in Control has been approved by
all necessary shareholder, creditor and regulatory actions, the Company will,
not later than the day prior to the date of the Change in Control, pay to the
Trustee of The United Illuminating Company Supplemental Retirement Benefit Trust
established pursuant to the Agreement, made as of the 1st day of June, 1995
between The United Illuminating Company and State Street Bank and Trust Company,
as Trustee, for the benefit of the Officer, cash in an amount equal to: (A) In
the event that the Officer's employment has been terminated or will be
terminated prior to the date of the Change in Control, a sum, calculated by the
Company's independent certified public accountants, reasonably sufficient to pay
and discharge the Company's future obligations, if any, to the Officer and/or
his personal representative and/or spouse, under Section (6)(a), Section (6)(b)
or Section (6)(d) hereof; or (B) in the event that the Officer's employment has
not been terminated and will not be terminated prior to the date of the Change
in Control, a sum, calculated by the Company's independent certified public
accountants, reasonably sufficient to pay and discharge the Company's
obligations to the Officer under Section (6)(d) hereof assuming, for purposes of
such calculation, that the Officer's employment is terminated under said Section
(6)(d) by a Notice of Termination delivered on the date of the Change in Control
and specifying an immediate Date of Termination.
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(b) On and after the date of the Change in Control, the
Officer's Base Salary may not be reduced by the Board of Directors to an annual
rate less than the rate fixed by the Board of Directors of the Company as a
result of its most recent review of salary rates, pursuant to Section (4)(a)
hereof, prior to the date of the Change in Control.
(9) TAX SAVINGS PROVISION
If any portion of the payments that the Officer has the right to
receive from the Company, or any affiliated entity, hereunder would constitute
"excess parachute payments" (as defined in Section 280G of the Internal Revenue
Code, and not governed by the terms defined in this Agreement) subject to the
excise tax imposed by Section 4999 of the Internal Revenue Code, such excess
parachute payments shall be reduced to the largest amount that will result in no
portion of such excess parachute payments being subject to the excise tax
imposed by Section 4999 of the Internal Revenue Code.
(10) CONFIDENTIAL INFORMATION
The Officer recognizes that Officer's employment by the Company is one
of the highest trust and confidence by reason of his access to and contract with
certain trade secrets and confidential and proprietary information of and
concerning the Company. The Officer agrees and covenants to use his best efforts
and exercise utmost diligence to protect and safeguard the trade secrets,
confidential business practices and proprietary information of and concerning
the Company, including, but not limited to, methods of doing business and
employees' compensation and contract terms (all of which are referred to as
"Proprietary Information") that are practices of or owned by either the Company
or any person that directly, or indirectly through one or more intermediaries,
controls or is controlled by, or is under common control with, the Company. The
Officer further agrees and covenants that, except with the prior written consent
of the Company, he will not, either during the term hereof or thereafter,
directly or indirectly, use for his own benefit or for the benefit of any other
person or organization, or disclose, disseminate or distribute to any other
person or organization, any of the Proprietary Information (whether or not
acquired, learned, obtained or developed by the Officer alone or in conjunction
with another), unless and until such Proprietary Information has become a matter
of public knowledge through no action or fault of the Officer or unless
otherwise required by court order to comply with legal process. All memoranda,
notes, records, drawings, documents or other writings whatsoever made, compiled,
acquired or received by the Officer during the term hereof arising out of, in
connection with, or related to any
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activity or business of the Company are and shall continue to be the sole and
exclusive property of the Company, and shall, together with all copies thereof,
be returned and delivered to the Company by the Officer immediately, when he
ceases to be employed by the Company, or at any other time upon the Company's
demand.
(11) NON-INTERFERENCE
The Officer agrees and covenants that, for a period of twelve (12)
months following the month during which he ceases to be employed by the Company,
he will not, unless the Company shall have granted prior written approval (which
may be withheld for any reason), for any reason whatsoever, in any capacity,
directly or indirectly:
(A) interfere with the relationship between the Company and any
of its employees, agents or representatives; or
(B) directly or indirectly divert or attempt to divert from the
Company any business in which the Company has been actively
engaged during the term hereof, or interfere with the
relationship between the Company and any other person in doing
business.
(12) ENFORCEMENT; SUCCESSORS; BINDING AGREEMENT
(a) The Company shall pay to the Officer and/or the Officer's
personal or legal representative and/or spouse all legal fees and expenses and
court costs, if any, incurred by the Officer and/or the Officer's personal or
legal representative and/or spouse in successful litigation to enforce the
Officer's rights under this Agreement.
(b) The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business or assets of the Company, by agreement in form
and substance reasonably satisfactory to the Officer, to expressly assume and
agree to perform this Agreement in the same manner and to the same 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 by the effectiveness of
any such succession shall be a breach of this Agreement and shall entitle the
Officer to compensation from the Company in the same amount and upon the same
terms as the Officer would be entitled to hereunder if the Officer terminated
the Officer's employment upon Breach by the Company, except that, for purposes
of implementing the foregoing, the date on which any such succession becomes
effective shall be deemed the Date of Termination. As used in this Agreement,
the
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term "the Company" shall include United Capital Investments, Inc., and any
parent and any successor to the business or assets as aforesaid which executes
and delivers the agreement provided for in this Section (10) or which otherwise
becomes bound by all the terms and provisions of this Agreement by operation of
law.
(c) This Agreement and all rights of the Officer hereunder
shall inure to the benefit of and be enforceable by the Officer's personal or
legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees. If the Officer should die while any amounts
would still be payable to the Officer hereunder if the Officer had continued to
live, all such amounts, unless otherwise provided herein, shall be paid in
accordance with the terms of this Agreement to the Officer's devisee, legatee or
other designee or, if there be no such designee, to the Officer's estate.
(13) NOTICE
For purposes of this Agreement, notices and all other communications to
either party hereunder provided for in the Agreement shall be in writing and
shall be deemed to have been duly given when delivered or mailed by United
States certified or registered mail, return receipt requested, postage prepaid,
addressed, in the case of the Company, at its executive offices, or, in the case
of the Officer, to him at his residence, or to such other address as either
party shall designate by giving written notice of such change to the other
party.
(14) MISCELLANEOUS
No provision of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is approved by the
Board of Directors of the Company and agreed to in a writing signed by the
Officer and such officers of the Company as may be specifically authorized by
the Board of Directors of the Company. 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 any similar or dissimilar provision or condition 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 that are not set forth expressly in this
Agreement. The validity, interpretation, construction and performance of this
Agreement shall be governed by the laws of the State of Connecticut.
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(15) 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.
(16) SURVIVAL
The provisions of this Agreement shall not survive the termination of
this Agreement or of the Officer's employment hereunder, except that the
provisions of Sections (4), (6), (8), (9), (10), (11), (12) and (13) hereof
shall survive such termination and shall be binding upon the parties and their
respective personal and legal representatives, executors, heirs, successors and
assigns.
(17) 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.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the date and year first above written.
Attest: United Capital Investments, Inc.
/s/ Susan E. Allen /s/ Robert L. Fiscus
- -------------------------- By: --------------------------------------
Secretary Chairman of the Board of Directors
/s/ Richard J. Nicholas
---------------------------
Richard J. Nicholas
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