Exhibit 10(ao)
Maine & Maritimes
Corporation
EMPLOYEE RETENTION
AGREEMENT
THIS EMPLOYEE RETENTION AGREEMENT
dated as of September 5, 2003 (this “Agreement”)
is entered into between Maine & Maritimes Corporation, a Maine
corporation (the “Company”), and Kurt A. Tornquist (the
“Executive”) (the Company and Executive are sometimes
referred to as “Party” or collectively
“Parties”).
RECITALS
WHEREAS, the Executive, has been
employed by the Company in a management capacity and is now its
Senior Vice President, Chief Financial Officer and Treasurer;
and
WHEREAS, the Board of Directors of
the Company has determined this Agreement to be in the best
interests of the stockholders of the Company, in order to encourage
the attention and dedication of the Executive to his assigned
duties with the Company without distraction in connection with
potentially disruptive circumstances arising from the possibility
of a Change in Control (as defined herein) or certain other events
specified in this Agreement;
Now, THEREFORE, in consideration of
the mutual promises and covenants contained herein and for other
good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged by the Parties, the Company and the
Executive agree as follows:
Section 1.
Certain
Definitions
As used herein, the following terms
have the indicated meanings:
(1)
“Cause”
for termination by the Company of
the Executive’s employment shall mean (i) the willful
and continued failure by the Executive to substantially perform his
duties with the Company after a written notice is delivered to the
Executive by the Company, which notice specifically identifies the
manner in which the Company believes that the Executive has not
substantially performed the Executive’s duties; or (ii) the
willful engaging by the Executive in gross misconduct that
is injurious to the Company, monetarily or otherwise (including,
without limitation, the Executive’s conviction, by a court of
competent jurisdiction, of a crime adversely reflecting on the
Executive’s honesty, trustworthiness or fitness to carry out
the responsibilities of his position with the Company). An act, or
failure to act, on the Executive’s part shall be deemed
“willful” where such act is done, or not done, by the
Executive: (i) in the absence of good faith; or (ii) without a
reasonable belief that the Executive’s act, or failure to
act, was in the best interest of the Company.
(2)
For the purpose of this definition
(“Change in Control”) only, the term
“Company,” first defined above, shall also be defined
to include Maine Public Service Company in addition to its parent,
Maine & Maritime Corporation. A “Change in
Control” shall be deemed to have occurred if the
conditions set forth in any one of the following paragraphs shall
have been satisfied:
(a)
any “person” (as such
term is used in Sections 13(d) and 14(d) of the Securities Exchange
Act of 1934, as amended) (other than the Company, any trustee or
other fiduciary holding securities under any employee benefit plan
of the Company, or any corporation owned directly or indirectly by
the stockholders of the Company in substantially the same
proportion as their
ownership of stock of the Company)
is or becomes the “beneficial owner” (as defined in
Rule 13d-3 under the Securities Exchange Act of 1934, as amended),
directly or indirectly, of securities of the Company representing
fifty percent or more of the combined voting power of the
Company’s thenoutstanding voting securities;
(b) a change in the composition of the Board of
Directors of the Company, as a result of which fewer than a
majority of the directors are persons who either (A) are directors
of the Company as of the date hereof or (B) were elected after
nomination by a majority of the directors of the Company on the
date hereof and directors so elected previously;
(c) any merger or consolidation of the Company,
approved by the stockholders of the Company, with any other
corporation; other than:
(A) any
such merger or consolidation that would result in the voting
securities of the Company outstanding immediately prior to the
merger or consolidation, continuing to represent (either by
remaining outstanding or by being converted into voting securities
of the surviving or parent entity) more than fifty percent of the
combined voting power of the voting securities (entitled to vote
generally for the election of directors) of the Company or such
surviving or parent entity outstanding immediately after such
merger or consolidation, or subsequently at any time as
contemplated by or as a result of, such merger or consolidation;
or
(B) any such merger or consolidation where such
merger or consolidation is effected to implement a recapitalization
or reincorporation of the Company (or similar transaction), in
which no “person” (as such term is used in Sections
13(d) and 14(d) of the Securities Exchange Act of 1934, as amended)
acquires fifty percent or more of the combined voting power of the
Company’s then-outstanding voting securities;
(d) any merger or consolidation of the Company in
which the Company is not the continuing or surviving corporation or
pursuant to which shares of the Company’s stock, would be
converted into cash, securities or other property; other
than a merger or consolidation of the Company in which the
stockholders of the Company immediately prior to the merger or
consolidation have substantially the same proportionate ownership
and voting control of the surviving corporation or parent entity
immediately after the merger or consolidation;
(e) except as described below, the Company ceases to
be a reporting company pursuant to Section 13 (a) of the
Securities Exchange Act of 1934 as amended, or any similar
successor provision;
(f) the number of the Company’s Outside
Directors, as defined below, is decreased by more than fifty
percent in any twenty-five month period or the number of the
Company’s directors increased in such a manner that the
Outside Directors constitute less than a majority of the
Board;
(g) the stockholders of the Company approve a plan
of complete liquidation of the Company or an agreement for the
sale, lease, exchange, liquidation, disposition or other transfer
(in one transaction or a series of transactions) by the Company of
all or substantially all of the Company’s assets (or any
transaction having a similar effect).
(h) further, a “Change in
Control” shall not be deemed to occur if the
conditions set forth in the following sub-paragraph shall have been
satisfied:
(A) a
merger, consolidation or reorganization of the Company if, upon
consummation of such transaction all of the outstanding voting
stock of the Company is owned, directly or indirectly, by a holding
company, and the holders of the Company’s common stock
immediately prior to the transaction have substantially the same
proportionate ownership and voting control of the holding
company.
(3)
“Good
Reason” for
termination by the Executive of the Executive’s employment
shall mean the occurrence of any one of the following acts unless
such act is corrected prior to the Termination Date specified in
the Termination Notice given in respect thereof or, in the case of
paragraph (d) below, such act is not objected to in writing by the
Executive within four months after notification by the Company to
the Executive of the Company’s intention to take the action
contemplated by such paragraph (d):
(a)
the assignment of duties to the
Executive which:
(i)
are materially different from his
duties immediately prior to the Change in Control, or
(ii)
result in his having significantly
less authority or responsibility than he had prior to the Change in
Control;
(b)
the Executive’s removal from,
or any failure to re-elect him to, any position he held immediately
prior to the Change in Control;
(c)
a reduction of the Executive’s
annual base salary in effect on the date of the Change in Control
or as the same may be increased from time to time
thereafter;
(d)
the Company’s transferring or
assigning the Executive to a place of employment more than one
hundred miles from Presque Isle, Maine, except where: (1) such
transfer or assignment is to a subsidiary or affiliate entity
location, consistent with the Executive’s duties; and (2) in
connection with required business travel to an extent substantially
consistent with the Executive’s bu
