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Exhibit 10.1
CONSULTING, CONFIDENTIALITY, AND
NON-COMPETITION AGREEMENT
THIS CONSULTING, CONFIDENTIALITY, AND NON-COMPETITION AGREEMENT
(the "Agreement") is made this 30th day of November, 2006, between
CORNING NATURAL GAS CORPORATION (the "Corporation"), a New York
corporation with its principal place of business at 330 W. William
Street, P.O. Box 58, Corning, New York 14830, and THOMAS K. BARRY
("Consultant"), with a home address of 10958 E. Lake Road,
Hammondsport, New York 14840.
ARTICLE 1
TERM OF CONTRACT
1.01. Term Of
Contract. This Agreement will become effective on
January 3, 2007, and will continue in effect for four
(4) years, until December 31, 2010, or until terminated
as provided in this Agreement.
ARTICLE 2
SERVICES TO BE PERFORMED BY CONSULTANT
2.01. Services To Be
Performed By Consultant. Consultant agrees to provide those
services requested by the Corporation’s CEO to assist in the
transition to a new management team at the Corporation.
2.02. Method of Performing
Services. Consultant and the Corporation’s CEO will
jointly determine the method, details, and means of performing the
services described in Section 2.01.
ARTICLE 3
PAYMENT FOR SERVICES
3.01. Payment to
Consultant. Corporation agrees to pay to Consultant the
amount of $150,000 per year for his services rendered under this
Agreement. Corporation will make payments in equal installments on
Corporation’s regular payroll dates.
3.02. Deduction in Payment
for First Year of Services. Notwithstanding the annual
payment set forth in section 3.01, Consultant’s annual
payment for the first year of this Agreement will be reduced by the
aggregate of the salary Corporation pays to Consultant and the
Corporation’s share of FICA taxes related to
Consultant’s employment with Corporation from the date of
Consultant’s resignation from Corporation’s Board of
Directors through May 1, 2007.
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Therefore, the Corporation will pay the Consultant no more than
$600,000 in the aggregate in salary and consulting fees under
Section 3.01 of this Agreement from the date of this Agreement
through its term.
3.03. Expenses.
With the Corporation’s prior approval, Corporation shall
reimburse or pay Consultant for any and all of his direct and
commercially reasonable costs and expenses incurred by him on
behalf of the Corporation in connection with the performance of the
Services.
3.04. Benefits and Deferred
Compensation. Consultant understands that the sole
compensation for the consulting services provided by this Agreement
is set forth in section 3.01. Consultant is not entitled to receive
any supplemental or other deferred compensation benefits. However,
nothing herein affects Consultant’s right to receive payments
under Corporation’s pension plan for non-union employees, or
any supplemental plan or under his deferred compensation agreement,
to which he is otherwise entitled as a former employee of
Corporation.
ARTICLE 4
OBLIGATIONS OF CONSULTANT
4.01. Best Efforts.
Consultant agrees to devote his best efforts to the performance of
the Services described in this Agreement.
4.02 Hours During Which
Services May Be Performed. Consultant agrees that any
services described in this Agreement that must be performed on
Corporation’s premises will be performed during
Corporation’s regular business hours.
4.03
Instrumentalities. Consultant is responsible for
supplying all means necessary for performing under this
Agreement.
4.04. Liability
Insurance. Consultant agrees to maintain a policy of
insurance to cover any negligent acts committed by Consultant or
Consultant’s employees or agents during the performance of
any duties under this Agreement. Consultant further agrees to hold
Corporation free and harmless from any and all claims arising from
any negligent act or omission.
4.05. Assignment by
Consultant. Neither this Agreement nor any duties or
obligations under this Agreement may be assigned by Consultant
without the prior written consent of Corporation.
4.06. Obligations upon
Termination of Services. Consultant agrees to comply with
Corporation’s exit procedures following termination or
expiration of this Agreement as a condition of Corporation’s
final payment to Consultant. Such procedures may include, but are
not limited to, notification to proper Corporation’s
officials, returning all Corporation’s equipment and security
badges, and execution of appropriate documents.
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ARTICLE 5
EXISTING AGREEMENTS WITH CONSULTANT
5.01. Existing Agreements
with Consultant. The Corporation and Consultant are parties
to (i) the Amended and Restated Employment Agreement dated as
of December 14, 2000 (as amended as of January 1, 2005,
the "Employment Agreement"); (ii) the Amended and Restated
Severance Agreement dated as of December 14, 2000 (as amended
as of January 1, 2005, the "Severance Agreement"); (iii) the
Amended and Restated Survivor Benefit Deferred Compensation
Agreement dated as of December 14, 2000 (as amended as of
January 1, 2005, the "Deferred Compensation Agreement"); and
(iv) the Assignment Agreement dated as of July 10, 2001
(the "Assignment Agreement").
5.02. Modification of the
Employment Agreement.
(A) Consultant hereby resigns as
Chairman of the Board, Chief Executive Officer and President of the
Corporation effective as of the date of this Agreement, and the
Corporation hereby accepts such resignation.
(B) Effective on the date of this
Agreement and through January 3, 2007, Consultant shall be
employed by the Corporation as the Special Assistant to the Chief
Executive Officer at (i) an annual salary as of the date of
this Agreement of $227,286 and (ii) Consultant’s current
health benefits as further described in Section 7(a) of the
Employment Agreement. Notwithstanding the foregoing, Consultant may
resign as Special Assistant to the Chief Executive Officer at any
time prior to January 3, 2007.
(C) The Chief Executive Officer of
the Corporation shall determine the method, details and means of
performing Consultant’s duties as Special Assistant to the
Chief Executive Officer.
(D) The Corporation hereby agrees
that Sections 7(a), 7(e) and 7(g) of the Employment Agreement
shall remain in full force and effect.
(E) Except for Sections 7(a),
7(e) and 7(g) of the Employment Agreement, the Employment Agreement
shall terminate and be of no further force and effect as of the
date of this Agreement. Section 7(a) of the Employment Agreement
shall terminate and be of no further force and effect on
January 3, 2007.
5.03. Termination of the
Severance Agreement. As of the date of this Agreement, the
Severance Agreement shall terminate and be of no further force and
effect.
5.04. Continuation of the
Deferred Compensation Agreement. The Deferred Compensation
Agreement shall remain in full force and effect, provided, however,
that any payments that Consultant may be entitled to under the
Deferred Compensation Agreement shall be funded only from assets
that are segregated and identified on the Corporation’s
balance sheet as of the date of this Agreement.
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5.05. Transfer of the
Assignment Agreement. As of the date of this Agreement, the
Corporation shall transfer, assign and set over to Consultant, at
no cost to Consultant, the Key Man Policy (as such term is defined
in the Assignment Agreement) and the Assignment Agreement shall
terminate and be of no further force and effect.
5.06. Pension
Benefits . Consultant shall be entitled to receive payments
under the Retirement Plan for Salaried and Non-Union Employees of
Corning Natural Gas Corporation pursuant to its terms (the "Pension
Plan").
5.07. No Other
Obligations . Consultant represents and acknowledges that
he has no severance, pension or other compensatory arrangements
with the Corporation other than the Pension Plan, Employment
Agreement, the Severance Agreement, the Deferred Compensation
Agreement and the Assignment Agreement. Other than as specifically
provided for in this Article 5, the Corporation shall have no
other obligations or liabilities to Consultant under the terms of
the Employment Agreement, the Severance Agreement, the Deferred
Compensation Agreement and the Assignment Agreement.
ARTICLE 6
TERMINATION OF AGREEMENT
6.01. Expiration of
Agreement. Unless otherwise terminated as provided in this
Agreement, this Agreement shall continue in force until
December 31, 2010.
6.02. Termination of
Consultant’s Consulting Obligations.
Consultant’s obligations to provide consulting services under
this Agreement shall terminate automatically on the occurrence of
any of the following events:
(A) Bankruptcy or insolvency of
either party.
(B) Sale of the business of the
Corporation.
(C) Death or dissolution of either
party.
(D) Upon the Corporation’s
breach of its payment obligations under this Agreement.
6.03. Termination of
Corporation’s Payment Obligations . The
Corporation’s obligation to make payments to Consultant under
this Agreement shall terminate automatically upon
Consultant’s material breach of any provision of this
Agreement.
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ARTICLE 7
COVENANTS, WARRANTIES AND REPRESENTATIONS OF
CONSULTANT
7.01. Warranties and
Representations of Consultant. Consultant warrants and
represents to Corporation:
(A) that he shall perform his
duties under this Agreement personally and shall not delegate the
performance of those duties to any other person without first
obtaining Corporation’s written consent.
(B) that the Services will be
performed in a timely, diligent, professional and workmanlike
manner in accordance with the highest applicable industry
standards, in accordance with this Agreement.
(C) that he will diligently devote
such time and best efforts as is reasonably required to
Corporation
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