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Exhibit 10.28
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CHANGE OF CONTROL AGREEMENT
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This
Agreement, made and entered into as of the 25th day of October,
2006 (the "Effective Date") by and between Bonalyn J. Hartley (the
"Employee") of Merrimack, New Hampshire and Pennichuck Corporation
(the "Corporation"), a New Hampshire corporation with principal
offices in Merrimack, New Hampshire.
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WHEREAS, the
Employee presently serves as the Vice President of Administration
of the Corporation and its subsidiaries, as such position may be
revised from time-to-time by action of the Board of Directors of
the Corporation or a committee thereof having authority with
respect to such appointment;
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WHEREAS, the
Corporation wishes to assure the continued availability of the
Employee's services and to create an environment which will promote
the Employee's giving impartial and objective advice in any
circumstances resulting from the possibility of a Change of Control
of the Corporation; and
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WHEREAS, the
Corporation and the Employee wish to provide the Employee with
financial protection in the event significant changes in the
Employee's employment status occur following a Change of Control of
the Corporation.
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NOW
THEREFORE, the Corporation and the Employee, in consideration of
the terms and conditions set forth herein and other valuable
consideration, receipt of which is hereby acknowledged, mutually
covenant and agree as follows:
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Article 1
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TERM
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(a) The term
of this Agreement shall be for the period commencing on the
Effective Date and ending two (2) years from the Effective Date,
unless the Employee's employment is sooner terminated as provided
in Section 6.1 hereof (the "Term"). On the first anniversary of the
Effective Date and on each subsequent anniversary of the Effective
Date, the Term of this Agreement shall automatically be extended
for an additional one (1) year period, and the provisions hereof
shall remain applicable for each such subsequent two-year period,
unless either party gives written notice to the other, not later
than each anniversary of the Effective Date, that it or he does not
concur in such extension.
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(b)
Notwithstanding the foregoing, in the event that there is a "Change
in Control" (as that term is defined in Article 3 below), the Term
of this Agreement will automatically be extended to two (2) years,
beginning on the day on which the Change of Control occurs.
Thereafter, this Agreement will be automatically extended as
described in paragraph (a) of this Article 1.
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<PAGE> -1-
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Article 2
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PAYMENTS UPON CHANGE OF CONTROL AND
TERMINATION EVENT
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The
Corporation shall make payments to the Employee as provided for in
Articles 4 and 7 upon the occurrence of both a Change of Control of
the Corporation and a Termination Event, as such terms are defined
in Article 3.
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Article 3
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DEFINITIONS
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(a) "Base
Amount" shall mean an amount equal to the greater of the Employee's
annual base salary, as adjusted from time-to-time by the Board of
Directors or a committee thereof having authority with respect to
the Employee's annual compensation, (1) as in effect immediately
prior to the Change of Control, or (2) as in effect on the date of
the Termination Event.
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(b) A
"Change of Control" shall be deemed to have occurred if any of the
following have occurred:
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(i)
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any individual, corporation (other than the
Corporation), partnership, trust, association, pool, syndicate, or
any other entity or any group of persons acting in concert becomes
the beneficial owner, as that concept is defined in Rule 13d-3
promulgated by the Securities Exchange Commission under the
Securities Exchange Act of 1934, as a result of any one or more
securities transactions (including gifts and stock repurchases but
excluding transactions described in subdivision (ii) following) of
securities of the Corporation possessing fifty-one percent (51%) or
more of the voting power for the election of directors of the
Corporation;
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(ii)
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there shall be consummated any consolidation,
merger or stock-for-stock exchange involving securities of the
Corporation in which the holders of voting securities of the
Corporation immediately prior to such consummation own, as a group,
immediately after such consummation, voting securities of the
Corporation (or if the Corporation does not survive such
transaction, voting securities of the corporation surviving such
transaction) having less than fifty percent (50%) of the total
voting power in an election of directors of the Corporation (or
such other surviving corporation);
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(iii)
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"approved directors" shall constitute less than
a majority of the entire Board of Directors of the Corporation,
with "approved directors" defined to mean the members of the Board
of Directors of the Corporation as of the date of this Agreement
and any subsequently elected members of the Board of Directors of
the Corporation who shall be nominated or approved by a majority of
the approved directors on the Board of Directors of the Corporation
prior to such election; or
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<PAGE> -2-
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(iv)
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there shall be consummated any sale, lease,
exchange or other transfer (in one transaction or a series of
related transactions, excluding any transaction described in
subdivision (ii) above), of all, or substantially all, of the
assets of the Corporation or its subsidiaries (on a consolidated
basis) to a party which is not controlled by or under common
control with the Corporation.
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(c) A
"Termination Event" shall be deemed to have occurred if, within the
twenty-four month period following a Change of Control: (i) the
Employee experiences the loss of her position by reason of
discharge or material demotion, for reasons other than termination
or demotion for Good Cause, or (ii) the Employee voluntarily
resigns her position following (1) the substantial withholding,
substantial adverse alteration (including assignment of duties that
are inconsistent with the Employee's position, duties, and status
immediately prior to the Change of Control) or substantial
reduction of responsibility, authority, or compensation (including
any compensation or benefit plan in which the Employee participates
or substitute plans adopted prior to the Change of Control) to
which the Employee was charged or empowered with or entitled to
immediately prior to a Change of Control of the Corporation or to
which he would normally be charged or empowered with or entitled to
from time to time by reason of her office, for reasons other than
Good Cause, or (2) the Employee being required to be based at any
office or location other than one within a 30-mile radius of the
office at which the Employee was based immediately prior to the
Change of Control.
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(d) "Good
Cause" shall mean: (i) the material willful or continued failure by
the Employee to perform her reasonably assigned duties for the
Corporation or a subsidiary (other than such failure resulting from
the Employee's incapacity due to physical or mental illness), after
a written demand for performance is delivered to the Employee by
the President of the Corporation or the applicable subsidiary (or
the respective Board of Directors if the Employee then serves in
the capacity of president thereof) which specifically identifies
the manner in which the President (or, as the case may be, the
Board) believes the Employee has not performed her dut
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