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 b
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