Exhibit (10)(iii)42
FORM OF AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
AGREEMENT
by and between CH Energy Group Inc. (“Energy Group”), a
New York corporation, and Tier IV Executive (the
“Executive”), dated as of the _________.
The
Board of Directors of Energy Group (the “Board”) has
determined that it is in the best interests of Energy Group and its
shareholders to assure that Energy Group will have the continued
dedication of the Executive, notwithstanding the possibility,
threat or occurrence of a Change of Control (as defined below) of
Energy Group. The Board believes it is imperative to diminish the
inevitable distraction of the Executive by virtue of the personal
uncertainties and risks created by a pending or threatened Change
of Control and to encourage the Executive's full attention and
dedication to Energy Group currently and in the event of any
threatened or pending Change of Control, and to provide the
Executive with compensation and benefits arrangements upon a Change
of Control which ensure that the compensation and benefits
expectations of the Executive will be satisfied and which are
competitive with those of other corporations. Therefore, in order
to accomplish these objectives, the Board has caused Energy Group
to enter into this Agreement with the Executive.
NOW,
THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1. This
Employment Agreement shall be between Energy Group and the
Executive named above for all periods during which the Executive
serves in the capacity as an officer of Energy Group or any of its
affiliated companies. Energy Group and the Executive are parties to
an Employment Agreement dated as of _________ (the “Original
Agreement”). Energy Group and the Executive hereby amend and
restate the Original Agreement so that this Agreement replaces and
supersedes the Original Agreement in its entirety.
2.
Certain Definitions .
(a) As
used in this Agreement, “Energy Group” shall mean CH
Energy Group, Inc. as hereinbefore defined and any successor to its
business and/or assets as aforesaid which assumes and agrees to
perform this Agreement by operation of law, or
otherwise.
(b) As
used in this Agreement, the term “affiliated companies”
shall include any company controlled by, controlling or under
common control with Energy Group.
(c) The
“Effective Date” shall mean the first date during the
Change of Control Period (as defined in Section 2(d)) on which a
Change of Control (as defined in Section 3) occurs. Anything in
this Agreement to the contrary notwithstanding, if a Change of
Control occurs and if the Executive's employment with Energy Group
or any of its affiliated companies is terminated prior to the date
on which the Change of Control occurs, and if it is
reasonably
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demonstrated
by the Executive that such termination of employment (i) was at the
request of a third party who has taken steps reasonably calculated
to effect a Change of Control or (ii) otherwise arose in connection
with or anticipation of a Change of Control, then for all purposes
of this Agreement the “Effective Date” shall mean the
date immediately prior to the date of such termination of
employment, and the Executive shall be entitled to all payments and
benefits under this Agreement as though the Executive had
terminated his employment for Good Reason. For purposes of the
immediately preceding sentence, a Change of Control means a Change
of Control that also constitutes a “change in the
ownership,” a “change in the effective control”
or a “change in the ownership of a substantial portion of the
assets” of Energy Group within the meaning of Section 409A of
the Internal Revenue Code of 1986, as amended (the
“Code”). For purposes of determining the timing of
payments and benefits to Executive under Section 7, the date of the
actual Change of Control (as defined in the immediately preceding
sentence) shall be treated as Executive's Date of Termination (in
lieu of the date set forth in Section 6(e)).
(d) The
“Change of Control Period” shall mean the period
commencing on the date hereof and ending on the following July 31,
which July 31 and each annual anniversary thereof shall be
hereinafter referred to as the “Renewal Date”. Unless
previously terminated, the Change of Control Period shall be
automatically extended so as to terminate one year from such
Renewal Date. Notwithstanding the foregoing, this Agreement may be
terminated by either the Executive or Energy Group or any of its
affiliated companies at any time prior to the Effective Date by
providing 60 days’ written notice to the other party, in
which case the Executive shall have no further rights under this
Agreement; provided , that such a notice shall be null and
void if it is reasonably demonstrated by the Executive that such
notice was given (i) at the request of a third party who has taken
steps reasonably calculated to effect a Change of Control or (ii)
otherwise in connection with or anticipation of a Change of
Control.
(e) The
“Multiple” shall mean (i) two if the Executive's Date
of Termination (as defined herein) occurs on or prior to the first
anniversary of the Effective Date, and (ii) one if the Executive's
Date of Termination occurs after the first anniversary of the
Effective Date but on or prior to the second anniversary of the
Effective Date.
3.
Change of Control . For the purpose of this Agreement, a
“Change of Control” shall mean:
(a) The
acquisition by any individual, entity or group (within the meaning
of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of
1934, as amended (the “Exchange Act”)) (a
“Person”) of beneficial ownership (within the meaning
of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of
either (x) the then outstanding shares of common stock of Energy
Group (the “Outstanding Energy Group Common Stock”) or
(y) the combined voting power of the then outstanding voting
securities of Energy Group entitled to vote generally in the
election of directors (the “Outstanding Energy Group Voting
Securities”); provided, however, that for purposes of this
subsection (a), the following acquisitions shall not constitute a
Change of Control: (i) any acquisition directly from Energy Group,
(ii) any acquisition by Energy Group, (iii) any acquisition by any
employee benefit plan (or related trust) sponsored or maintained by
Energy Group or its affiliated companies or (iv) any acquisition by
any corporation
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pursuant to
a transaction which complies with clauses (i), (ii) and (iii) of
subsection (c) of this Section 3; or
(b) Individuals
who, as of the date hereof, constitute the Board (the
“Incumbent Board”) cease for any reason to constitute
at least a majority of the Board; provided, however, that any
individual becoming a director subsequent to the date hereof whose
election, or nomination for election by Energy Group's
shareholders, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board shall be considered
as though such individual were a member of the Incumbent Board, but
excluding, for this purpose, any such individual whose initial
assumption of office occurs as a result of an actual or threatened
election contest with respect to the election or removal of
directors or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board;
or
(c) Consummation
of a reorganization, merger or consolidation or sale or other
disposition of all or substantially all of the assets of Energy
Group (a “Business Combination”), in each case, unless,
following such Business Combination, (i) all or substantially all
of the individuals and entities who were the beneficial owners,
respectively, of the Outstanding Energy Group Common Stock and
Outstanding Energy Group Voting Securities immediately prior to
such Business Combination beneficially own, directly or indirectly,
more than 60% of, respectively, the then outstanding shares of
common stock and the combined voting power of the then outstanding
voting securities entitled to vote generally in the election of
directors, as the case may be, of the corporation resulting from
such Business Combination (including, without limitation, a
corporation which as a result of such transaction owns Energy Group
or all or substantially all of Energy Group's assets either
directly or through one or more of its affiliated companies) in
substantially the same proportions as their ownership, immediately
prior to such Business Combination of the Outstanding Common Stock
and Outstanding Energy Group Voting Securities, as the case may be,
(ii) no Person (excluding any corporation resulting from such
Business Combination or any employee benefit plan (or related
trust) of Energy Group or such corporation resulting from such
Business Combination) beneficially owns, directly or indirectly,
20% or more of, respectively, the then outstanding shares of common
stock of the corporation resulting from such Business Combination
or the combined voting power of the then outstanding voting
securities of such corporation except to the extent that such
ownership existed prior to the Business Combination and (iii) at
least a majority of the members of the board of directors of the
corporation resulting from such Business Combination were members
of the Incumbent Board at the time of the execution of the initial
agreement, or of the action of the Board, providing for such
Business combination; or
(d) Approval
by the shareholders of Energy Group of a complete liquidation or
dissolution of Energy Group.
4.
Employment Period . Energy Group hereby agrees to continue,
or cause to be continued, the Executive in its employ, or in the
employ of any of its affiliated companies, and the Executive hereby
agrees to remain in the employ of Energy Group or any of its
affiliated companies subject to the terms and conditions of this
Agreement, for the period commencing on
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the
Effective Date and ending on the second anniversary of such date
(the “Employment Period”).
5.
Terms of Employment .
(a)
Position and Duties .
(i) During
the Employment Period, the Executive's authority, duties and
responsibilities shall, in the aggregate, be at least commensurate
in all material respects with the most significant of those
exercised and assigned at any time during the 120-day period
immediately preceding the Effective Date, and neither a reduced
scope of the Executive's responsibilities resulting from the fact
that the Change of Control has created a larger organization, nor a
change in the Executive's position (including status, offices,
titles and reporting requirements) shall be the sole basis for
determining whether the requirements of this Section 5(a)(i) are
met.
(ii) During
the Employment Period, the Executive's services shall be performed
at the location where the Executive was employed immediately
preceding the Effective Date or any office or location less than 50
miles from such location.
(iii) During
the Employment Period, and excluding any periods of vacation and
sick leave to which the Executive is entitled, the Executive agrees
to devote reasonable attention and time during normal business
hours to the business and affairs of Energy Group or any of its
affiliated companies and, to the extent necessary to discharge the
responsibilities assigned to the Executive hereunder, to use the
Executive's reasonable best efforts to perform faithfully and
efficiently such responsibilities. During the Employment Period it
shall not be a violation of this Agreement for the Executive to
serve on civic or charitable boards or committees, so long as such
activities do not significantly interfere with the performance of
the Executive's responsibilities as an employee of Energy Group or
any of its affiliated companies in accordance with this Agreement.
It is expressly understood and agreed that to the extent that any
such activities have been conducted by the Executive prior to the
Effective Date, the continued conduct of such activities (or the
conduct of activities similar in nature and scope thereto)
subsequent to the Effective Date shall not thereafter be deemed to
interfere with the performance of the Executive's responsibilities
to Energy Group or any of its affiliated companies.
(b)
Compensation .
(i)
Base Salary . During the Employment Period, the Executive
shall receive an annual base salary (“Annual Base
Salary”), which shall be paid at a monthly rate, at least
equal to twelve times the highest monthly base salary paid or
payable, including any base salary which has been earned but
deferred, to the Executive by Energy Group or any of its affiliated
companies in respect of the twelve-month period immediately
preceding the month in which the Effective Date occurs. During the
Employment Period, the Annual Base Salary shall be reviewed no more
than 12 months after the last salary increase awarded to the
Executive prior
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to the
Effective Date and thereafter at least annually. Any increase in
Annual Base Salary shall not serve to limit or reduce any other
obligation to the Executive under this Agreement. Annual Base
Salary shall not be reduced after any such increase and the term
Annual Base Salary as used in this Agreement shall refer to Annual
Base Salary as so increased.
(ii)
Annual Bonus . In addition to Annual Base Salary, the
Executive shall be awarded, for each fiscal year ending during the
Employment Period, an annual bonus (the “Annual Bonus”)
in cash at least equal to the average of the bonuses payable under
Energy Group's Executive Annual Incentive Plan, if applicable, or
any comparable annual bonus under any predecessor or successor
plan, for the last three full fiscal years prior to the Effective
Date, or if the Executive was eligible to earn such a bonus for
less than the last three full fiscal years, for the fiscal years
during which the Executive was eligible to earn such a bonus
immediately prior to the Effective Date (annualized in the event
that the Executive was not employed by Energy Group or its
affiliated companies (or was not eligible to earn such a bonus) for
the whole of each such fiscal year) (the “Average Annual
Bonus”). If the Executive was not eligible to earn such an
annual bonus for any fiscal year ending on or before the Effective
Date, then the Average Annual Bonus shall be deemed to equal the
Executive's target annual bonus as in effect immediately prior to
the Effective Date. Each such Annual Bonus shall be paid no later
than two and one-half months after the end of the fiscal year next
following the fiscal year for which the Annual Bonus is
awarded.
(iii)
Incentive, Savings and Retirement Plans . During the
Employment Period, the Executive shall be entitled to participate
in all incentive, savings and retirement plans, practices, policies
and programs applicable generally to other peer executives of
Energy Group or its affiliated companies, but in no event shall
such plans, practices, policies and programs provide the Executive
with incentive opportunities (measured with respect to both regular
and special incentive opportunities, to the extent, if any, that
such distinction is applicable), savings opportunities and
retirement benefit opportunities, in each case, less favorable, in
the aggregate, than the most favorable of those provided by Energy
Group or its affiliated companies for the Executive under such
plans, practices, policies and programs as in effect at any time
during the 120-day period immediately preceding the Effective Date
or if more favorable to the Executive, those provided generally at
any time after the Effective Date to other peer executives of
Energy Group or its affiliated companies.
(iv)
Welfare Benefit Plans . During the Employment Period, the
Executive and/or the Executive's family, as the case may be, shall
be eligible for participation in and shall receive all benefits
under welfare benefit plans, practices, policies and programs
provided by Energy Group or its affiliated companies (including,
without limitation, medical, prescription, dental, disability,
employee life, group life, accidental death and travel accident
insurance plans and programs) to the extent applicable generally to
other peer executives of Energy Group or its affiliated companies,
but in no event shall such plans, practices, policies and programs
provide the Executive with benefits which are less favorable, in
the aggregate, than the most favorable of such plans, practices,
policies and programs in effect for the Executive at any time
during the 120-day period immediately preceding the Effective Date
or, if more favorable to
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the
Executive, those provided generally at any time after the Effective
Date to other peer executives of Energy Group or its affiliated
companies.
(v)
Expenses . During the Employment Period, the Executive shall
be entitled to receive prompt reimbursement for all reasonable
expenses incurred by the Executive in accordance with the most
favorable policies, practices and procedures of Energy Group or any
of its affiliated companies in effect for the Executive at any time
during the 120-day period immediately preceding the Effective Date
or, if more favorable to the Executive, as in effect generally at
any time thereafter with respect to other peer executives of Energy
Group or any of its affiliated companies.
(vi)
Fringe Benefits . During the Employment Period, the
Executive shall be entitled to fringe benefits, including, without
limitation, use of an automobile and payment of related expenses,
in accordance with the most favorable plans, practices, programs
and policies of Energy Group or any of its affiliated companies in
effect for the Executive at any time during the 120-day period
immediately preceding the Effective Date or, if more favorable to
the Executive, as in effect generally at any time thereafter with
respect to other peer executives of Energy Group or any of its
affiliated companies.
(vii)
Vacation . During the Employment Period, the Executive shall
be entitled to paid vacation in accordance with the most favorable
plans, policies, programs and practices of Energy Group or any of
its affiliated companies as in effect for the Executive at any time
during the 120-day period immediately preceding the Effective Date
or, if more favorable to the Executive, as in effect generally at
any time thereafter with respect to other peer executives of Energy
Group or any of its affiliated companies.
(viii)
Certain Exclusions . In determining the benefits provided in
subclauses (i) through and including (viii) of this paragraph (b),
there shall be excluded from consideration any such benefits
provided by any of the affiliated companies during the measuring
periods, if any, referred to in such subclauses if Energy Group has
elected not to enter into Employment Agreements (of this Type) with
executives of such affiliated companies.
6.
Termination of Employment .
(a)
Death or Disability . The Executive's employment shall
terminate automatically upon the Executive's death during the
Employment Period. If Energy Group or any of its affiliated
companies determines in good faith that the Disability of the
Executive has occurred during the Employment Period (pursuant to
the definition of Disability set forth below), it may give to the
Executive written notice in accordance with Section 16(b) of this
Agreement of its intention to terminate the Executive's employment;
provided that such notice is provided no later than 9 months
following the Executive's first day of Disability. In such event,
the Executive's employment with Energy Group or any of its
affiliated companies shall terminate effective on the 30th day
after receipt of such notice by the Executive (the
“Disability Effective Date”), provided that, within the
30 days after such receipt, the Executive shall not have returned
to full-time performance of the Executive's duties. For purposes of
this Agreement, “Disability”
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shall mean
the absence of the Executive from the Executive's duties with
Energy Group or any of its affiliated companies on a full-time
basis for at least 180 consecutive business days as a result of any
medically determinable physical or mental impairment resulting in
the Executive's inability to perform the duties of his position or
any substantially similar position, where such impairment can be
expected to result in death or can be expected to last for a
continuous period of not less than six months. The determination of
Disability shall be made by a physician selected by Energy Group or
its insurers and acceptable to the Executive or the Executive's
legal representative.
(b)
Cause . The Executive's employment during the Employment
Period may be terminated for Cause. For purposes of this Agreement,
“Cause” shall mean:
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(i) the
willful and continued failure of the Executive to perform
substantially the Executive's duties with Energy Group or any of
its affiliated companies (other than any such failure resulting
from incapacity due to physical or mental illness), after a written
demand for substantial performance is delivered to the Executive by
the Board or the Chief Executive Officer of Energy Group which
specifically identifies the manner in which the Board or Chief
Executive Officer believes that the Executive has not substantially
performed the Executive's duties;
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(ii) the
willful engaging by the Executive in illegal conduct or gross
misconduct which is materially and demonstrably injurious to Energy
Group or any of its affiliated companies;
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(iii) the
repeated use of alcohol by the Executive that materially interferes
with Executive’s duties, use of illegal drugs by the
Executive, or a violation by the Executive of the drug and/or
alcohol policies of Energy Group or any of its affiliated
companies;
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(iv) a
conviction, guilty plea or plea of nolo contendere of the
Executive for any crime involving moral turpitude or for any
felony;
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(v) a
breach by the Executive of his fiduciary duties of loyalty or care
to Energy Group or any of its affiliated companies or a material
violation of the Code of Business Conduct and Ethics, or similar
policies, of Energy Group or any of its affiliated companies;
or
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(vi) the
breach by the Executive of the confidentiality provision set forth
in Section 11(a) hereof.
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For
purposes of this provision, no act or failure to act, on the part
of the Executive, shall be considered “willful” unless
it is done, or omitted to be done, by the Executive in bad faith or
without reasonable belief that the Executive's action or omission
was in the best interests of Energy Group or any of its affiliated
companies. Any act, or failure to act, based upon authority given
pursuant to a resolution duly adopted by the Board or upon the
instructions of the Chief
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Executive
Officer or a senior officer of Energy Group or any of its
affiliated companies based upon the advice of counsel for Energy
Group shall be conclusively presumed to be done, or omitted to be
done, by the Executive in good faith and in the best interests of
Energy Group or any of its affiliated companies.
(c)
Good Reason . The Executive's employment may be terminated
by the Executive for Good Reason. For purposes of this Agreement,
“Good Reason” shall mean:
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(i) any
material reduction in the Executive's authority, duties or
responsibilities that is not permitted by Section 5(a)(i) of this
Agreement, without the Executive's written consent, excluding for
this purpose an action not taken in bad faith and which is remedied
by Energy Group or any of its affiliated companies promptly after
receipt of notice thereof given by the Executive;
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(ii) any
failure by Energy Group or any of its affiliated companies to
comply with any of the provisions of Section 5(b) of this
Agreement, other than a failure not occurring in bad faith and
which is remedied by Energy Group or any of its affiliated
companies promptly after receipt of notice thereof given by the
Executive;
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(iii) Energy
Group or any of its affiliated companies requiring the Executive to
be based at any office or location other than as provided in
Section 5(a)(ii) of this Agreement;
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(iv) any
purported termination by Energy Group or any of its affiliated
companies of the Executive's employment otherwise than as expressly
permitted by this Agreement; or
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(v) any
failure by Energy Group or any of its affiliated companies to
comply with and satisfy Section 12(c) of this Agreement.
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For
purposes of this Section 6(c), any claim by the Executive that Good
Reason exists shall be presumed to be correct unless Energy Group
establishes by clear and convincing evidence that Good Reason does
not exist.
(d)
Notice of Termination . Any termination by Energy Group or
any of its affiliated companies for Cause, or by the Executive for
Good Reason, shall be communicated by Notice of Termination to the
other party hereto given in accordance with Section 16(b) of this
Agreement. For purposes of this Agreement, a “Notice of
Termination” means a written notice which (i) indicates the
specific termination provision in this Agreement relied upon, (ii)
to the extent applicable, sets forth in reasonable detail the facts
and circumstances claimed to provide a basis for termination of the
Executive's employment under the provision so indicated and (iii)
if the Date of Termi
