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Exhibit 10.1
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EMPLOYMENT
AGREEMENT
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This Agreement, made and
effective as of the 31st day of January, 2005 by and between
Michael C.J. Fallon (the "Executive") of 11 Main St., Hancock, New
Hampshire 03449 and Pennichuck Corporation (the "Corporation"), a
New Hampshire corporation with principal offices at 25 Manchester
St., Merrimack, New Hampshire 03054.
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For good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, and in consideration of the mutual covenants and
promises set forth in this Agreement, the parties agree as
follows:
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ARTICLE I
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EMPLOYMENT
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1.1. The
Corporation hereby employs the Executive and the Executive hereby
accepts employment with the Corporation on the date hereof for the
Term (as defined below) of the Agreement, in the position and with
the duties and responsibilities set forth in Article II below and
upon the other terms and subject to the conditions hereinafter set
forth.
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ARTICLE II
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POSITION, DUTIES AND
RESPONSIBILITIES
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2.1. During
the Term of this Agreement, the Executive shall serve as the
President of The Southwood Corporation ("Southwood"). Subject to
the supervision, control and guidance of the Chief Executive
Officer and the Board of Directors of the Corporation (the
"Board"), the Executive shall have all of the duties,
responsibilities and authorities typically enjoyed and performed by
a president of a corporation to control the day-to-day operations
of Southwood, including, by example but not by way of limitation,
the supervision over the property, business and affairs of
Southwood.
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2.2. The
Executive shall devote substantially all of his business time and
attention to the business and affairs of Southwood consistent with
his executive position with Southwood and the Corporation, except
for vacations permitted pursuant to Section 5.3 and Disability (as
defined in Section 7.5 hereof). Nothing in this Agreement, however,
shall preclude the Executive from engaging in charitable
activities, community affairs and corporate boards, provided that
such activities do not unreasonably interfere with the performance
of his duties and responsibilities enumerated within this Agreement
as determined by the Board.
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ARTICLE III
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TERM
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3.1. Unless
terminated sooner in accordance with the terms hereof, the term of
employment under this Agreement ("Term") shall be for an initial
period commencing on January 31, 2005 ("Effective Date") and ending
two (2) years from the Effective Date; provided, however, that
commencing on the first anniversary of the Effective Date and on or
about each anniversary of the Effective Date thereafter, the term
of this Agreement may be extended for subsequent one (1) year
periods by vote of the Board of Directors, and in which case the
provisions hereof shall remain applicable for each of such
subsequent two-year periods.
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<PAGE>
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ARTICLE IV
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COMPENSATION
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4.1. Base
Salary. The Executive shall be paid a base salary (the "Base
Salary") equal to One Hundred Forty Thousand ($140,000.00) Dollars
per annum for the Term. The Base Salary shall be payable to the
Executive in installments, less state and federal income tax
withholdings and other normal employee deductions, on the date on
which the Corporation's other executive officers are paid, but in
no event less frequently than monthly. The Base Salary shall be
reviewed by the Board each year (on or about the first business day
of each calendar year) and shall be subject to upward adjustment
only , in the absolute discretion of the Board taking
into account, but not limited to additional responsibilities, if
any, which may have been assigned to him, corporate and individual
performance and general business conditions.
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4.2. Incentive
Compensation. During the Term, the Executive shall generally be
entitled to participate in the Corporation's bonus and incentive
compensation plan, as amended from time to time, and which may be
made available to executive officers of the Corporation; provided
that the Executive shall be eligible for a targeted annual bonus
opportunity of thirty-five (35%) percent of the Base Salary (the
"Targeted Annual Bonus Incentive") if bonuses are afforded to the
Corporation's other employees or executives. The level of the
annual bonus award beyond the Targeted Bonus Incentive will be
based upon Southwood's financial performance, the Corporation's
financial performance, and the Executive's overall job performance,
and, at the discretion of the Compensation and Benefits Committee
of the Board, in consultation with the Chief Executive Officer, may
be increased for any one year.
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4.3. Stock
Options. Subject to the Board's approval, on the Effective Date,
the Executive shall be granted Ten Thousand (10,000) non-qualified
options to acquire common shares of the Corporation pursuant to the
Corporation's existing stock option plans at a strike price
calculated as of the Effective Date to be set by the Board; said
options will vest over a three-year period, with one third, or
Three Thousand Three Hundred Thirty-Four (3,334), options vesting
upon the Effective Date; another one third, or Three Thousand Three
Hundred Thirty-Three (3,333), options vesting on the first
anniversary of the Effective Date; and another one third, or Three
Thousand Three Hundred Thirty-Three (3,333), options vesting on the
day before the second anniversary of the Effective Date; and
provided further, all of said options shall vest immediately in the
event: (A) the Executive's employment is terminated without "Cause"
(as that term is defined in Section 7.2 hereof); or (B) the
Executive resigns for "Good Reason" (as that term is defined in
Section 7.3 hereof); or (C) there is a Change of Control (as that
term is defined in Section 7.4 hereof). Beginning in calendar year
2006 and thereafter, the Executive may receive stock option grant
awards at the discretion of the Board on or about the month of
March of each calendar year during the Term and generally be
entitled to participate in any stock option plan or plans which may
be made available by the Corporation to its executive officers.
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Federal, state, and local
withholding, social security, and other appropriate taxes shall be
deducted from all compensation paid to, or provided by the
Corporation for, Executive as and to the extent required by
law.
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<PAGE>
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ARTICLE V
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FRINGE BENEFIT
PLANS
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5.1. Employee
Benefit Programs. The Executive shall be entitled to (A) receive
health and dental insurance coverage, as and to the extent provided
by the Corporation to its executive officers, provided that the
Corporation shall also reimburse the Executive for the cost of
continuing his health coverage during the initial ninety (90) day
waiting period imposed by the Corporation's health insurance plan;
(B) receive group life and disability coverage, as and to the
extent provided by the Corporation to its executive officers; (C)
receive insurance on the life of the Executive in the amount of
three (3) times his annual salary, and (D) be a full participant in
(1) all of the Corporation's pension and other retirement plans and
profit-sharing plans, if any, or equivalent successor plans, if
any, that may hereafter be adopted and maintained by the
Corporation in each case with at least the same opportunity to
participate therein as shall be applicable to other executive
officers of the Corporation and (2) all of the Corporation's other
benefit plans which may be in effect from time to time. Further,
the Corporation shall provide the Executive with (a) short term
disability coverage encompassing up to sixty percent (60%) of his
then Base Salary for a period of up to twenty-six (26) weeks, as
well as (b) long term disability coverage (at the Executive's
option) encompassing up to sixty percent (60%) of his then Base
Salary up to a maximum benefit of Six Thousand ($6,000) Dollars per
month. The Corporation acknowledges that the Executive currently
meets the eligibility criteria for participation in all of the
Corporation's present employee benefit programs.
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5.2. Reimbursement
of Expenses. It is contemplated that in connection with the
Executive's employment hereunder, the Executive may be required to
incur business, entertainment and travel expenses. The Corporation
agrees to promptly reimburse the Executive in full for all
reasonable out-of-pocket business, entertainment and other related
expenses (including all expenses of travel and living expenses
while away from home on business at the request of, and in the
service of, the Corporation) incurred or expended by the Executive
incident to the performance of his duties hereunder; provided, that
the Executive properly accounts for such expenses in accordance
with the policies and procedures established by the Board and
applicable to the executive officers of the Corporation. The
Corporation, in accordance with the terms of this paragraph and
during the Term of the Executive's employment, will also pay for
the Executive's annual membership fees in the Urban Land Institute,
and the reasonable costs, including but not limited to travel and
living expenses, incurred by the Executive to attend meetings and
events organized by such organization.
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5.3. Vacation.
The Executive shall be entitled, in each year during the Term, to
the number of paid vacation days determined by the Corporation from
time to time to be appropriate for its executive officers, but in
no event less than four (4) weeks in any such year (pro-rated, as
necessary, for partial calendar years during the Term). The
Executive may take his allotted vacation days at such times as are
mutually convenient for the Corporation and the Executive,
consistent with respect to its executive officers. The Executive
shall also be entitled to all paid holidays given by the
Corporation to its executive officers.
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5.4 Automobile.
The Executive shall be provided the use of an automobile. The
Corporation shall pay all gas, upkeep, insurance coverage, and
maintenance on said vehicle; provided, however, that the value of
any personal use thereof shall be included in the Executive's
taxable wages reported by the Corporation as and to the extent
required by applicable law.
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5.5. &nbs
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