|
Exhibit 10.2
EMPLOYMENT AGREEMENT
This Agreement made and entered
into this 30th day of November, 2006 by and between MICHAEL
GERMAN (the "Executive") and CORNING NATURAL GAS
CORPORATION a New York corporation having its principal place
of business in Corning, New York (the "Company").
WITNESSETH:
WHEREAS , the Company
desires to employ the Executive for a period commencing on
December 18, 2006 (the "Effective Date"), and ending three
(3) years thereafter unless renewed per Section 11 (the
"Employment Period"), and the Executive desires to work for the
Company during the Employment Period upon the terms and conditions
hereinafter provided:
NOW, THEREFORE , in
consideration of the mutual covenants and agreements contained
herein, the parties agree as follows:
1. EMPLOYMENT .
During the Employment Period, the
Executive shall serve as President and Chief Executive Officer of
the Company, with such duties, authorities and responsibilities as
are normally associated with and appropriate for such positions.
The Executive shall report directly to the Board of Directors of
the Company. The Executive shall devote his full business time,
effort, skill and attention (other than absences due to illness or
authorized vacation time) to the performance of his duties for the
Company, shall faithfully, loyally and to the best of his ability
perform his duties and shall comply with the reasonable
instructions of the Board of Directors and the Chairman.
Notwithstanding the foregoing, the Executive shall be permitted, to
the extent such activities do not significantly interfere with his
performance of his duties and responsibilities hereunder, to
(i) manage his personal financial affairs, (ii) serve on
civic or charitable boards or committees with the prior approval of
the Chairman, (iii) make presentations and lectures. The
Executive further agrees that during the Employment Period, he will
not engage in any other occupation or employment without the prior
approval of the Board of
Directors. The Company further agrees that for so long as
Executive is the Chief Executive Officer of the Company, he shall
also serve as a member of the Board of Directors, subject to
receiving the requisite vote of the Stockholders.
The Executive additionally agrees
that, subject to complying with his general fiduciary duties, he
will follow all policies and practices of the Company as presently
in effect or hereafter established by the Company, and will not
depart from such practices and policies or commit or bind the
Company in any manner contrary thereto, and agrees that in all that
he may do he will be governed by the will and direction of the
Chairman and the Board of Directors and agrees to consult with and
determine the will and direction of the Chairman and the Board of
Directors in all business matters, except ordinary matters.
2. COMPENSATION AND BENEFITS .
2.1 Salary . As basic
compensation for the services to be rendered by the Executive to
the Company during the Employment Period, the Company shall pay the
Executive during the Employment Period a salary in the amount of
One Hundred Fifty Thousand Dollars ($150,000.00) annually, payable
in twenty-six (26) equal biweekly installments, less such
deductions and amounts to be withheld as may be required by
applicable law and regulations.
2.2 Bonus . Executive shall
be entitled to a bonus in the event that the Company’s net
after tax income as calculated from its consolidated statements of
income ("Net Income") for any fiscal year commencing with the
fiscal year October 1, 2006 equals or exceeds $1.00 per share
of the Company’s then outstanding shares of common stock,
to-wit: If Company’s Net Income equals or exceeds $1.00 per
share but is less than $1.50 per share, Executive shall be entitled
to a bonus equal to twenty-five percent (25%) of his salary; if
Company’s Net Income equals or exceed $1.50 per share but is
less then $2.00 per share, Executive shall be entitled to a bonus
equal to fifty (50%) of his salary; if Company’s Net Income
equals or exceeds $2.00 per share, Executive shall be entitled to a
bonus equal to one hundred percent (100%) of his salary. The
Company’s Board of Directors shall adjust the per share goals
equitably for any stock splits, combination, reorganization,
reclassification or similar event. The Company’s Net Income
shall be determined in accordance with the Company’s audited
consolidated statements of income
2
prepared in accordance with general accepted accounting
principles used in the United States, consistently applied unless
changed from time to time as approved by the Company’s audit
committee, and said Net Income shall be further reflected by the
Company’s annual report on Form 10-K commencing with the
fiscal year beginning October 1, 2006. The bonus due
Executive, if any, pursuant to this provision shall be paid not
later than seventy five (75) calendar days following the
filing of the Company’s 10-K. It shall be a condition of
Executive’s entitlement to any such bonus with respect to any
year of the Employment Period that Executive shall be employed by
the Company throughout the entire year of the Employment Period;
provided, however, that Company agrees that there will be no
reduction in any bonus due Executive for the first (1
st ) year of the
Employment Period notwithstanding the fact that Executive shall not
have worked for the entire year. It is further agreed by Company
and Executive that unless the Employment Period is extended for the
entire fiscal year beginning October 1, 2009, Executive shall
not be entitled to any bonus for the months of his Employment
Period that extended into the fiscal year commencing
October 1, 2009, and as such, no proration shall
occur.
2.3 Relocation Expenses .
In further consideration of Executive’s agreement to be
employed by Company pursuant to the terms and provisions hereof,
Company agrees to pay Executive his moving expenses for him and his
family from Burlington, Connecticut not to exceed Fifteen Thousand
Dollars ($15,000.00), plus six months of lodging expenses incurred
in Corning, New York not to exceed Twelve Thousand Dollars
($12,000).
2.4 Benefits . The
Executive shall be entitled to participate in or receive
compensation and/or benefits, as applicable, under all employee
benefit plans, and all employee benefit arrangements and vacation
policies made available by Company now or during the Employment
Period to its executives and key management employees, subject to
and on a basis consistent with the terms, conditions and overall
administration of such plans and arrangements; provided, however,
that there shall be no duplication of the compensation and benefits
created by this Agreement. The Executive’s participation in
such plans and arrangements shall be on an appropriate level for
the positions of President and Chief Executive Officer, as
determined by the Board of Directors.
3
2.5 Expense Reimbursement .
Company shall reimburse on behalf of Executive such reasonable
expenses as Executive may incur in connection with the performance
of Executive’s duties hereunder, provided that Executive
shall provide Company with supporting documentation including
receipts with respect to any expense for which reimbursement is
sought by Executive.
3. TERMINATION .
3.1 Death . This Agreement
and the respective rights and obligations of the parties hereunder
shall terminate upon the death of the Executive during the
Employment Period.
3.2 Disability . In the
event that Executive shall become physically or mentally disabled
during the Employment Period, and in the event that such disability
persists continuously for a period in excess of one hundred twenty
(120) days, this Agreement shall thereupon terminate. During
the first 120 days of any such disability, Company shall pay
to Executive his salary, and benefits until Executive’s
employment is terminated; provided, however, Executive’s
salary payments shall be reduced by the sum of the amounts, if any,
payable to Executive under any disability benefit plans of the
Company or under the Social Security disability insurance
program.
3.3 Termination for Cause by
the Company . The Company may at any time during the Employment
Period by written notice to the Executive, terminate this Agreement
and discharge the Executive for cause, whereupon the respective
rights and obligations of the parties hereunder shall likewise
terminate. As used herein, the term "for cause" shall be deemed to
include, without limitation, conviction of any crime (other than a
traffic offense) involving dishonesty or moral turpitude,
misappropriation of any money or other assets or properties of the
Company, or other acts of dishonestly, material failure by
Executive, in the judgment of the Chairman as ratified by a
resolution by Company’s Board of Directors, to perform his
duties after written notice thereof and a thirty (30) day
period in which to cure such failure, or breach by the Executive of
any of the terms and provisions of this Agreement and failure to
cure such breach within thirty (30) days after written notice
thereof.
4
3.4 Termination by Executive
for Convenience . This Agreement may be terminated by the
written resignation of Executive effective on the date specified in
such resignation notice by Executive, which shall not be sooner
than ninety (90) days after the date of such notice of
resignation. In the event that Executive elects to terminate this
Agreement by resignation in accordance with this provision, Company
may elect notwithstanding the effective date of such termination
contained in Executive’s resignation notice to make
Executive’s resignation effective on such earlier date, if
any, as Company determines in its sole discretion, provided that
notwithstanding such election and determination by Company, Company
shall be obligated to pay Executive’s salary and other
benefits due hereunder through a date not earlier than ninety (90)
days after the date of Executive’s resignation notice.
3.5 Termination by Executive
for Good Reason . This Agreement may be terminated by Executive
for "Good Reason" as hereafter defined by written notice to the
Company, which shall not be sooner than ninety (90) days after
written notice of such an event has been given to the Company by
Executive.
4. STOCK OPTIONS .
4.1 Options Granted to
Executive . Company hereby agrees to permit the Executive to
participate in a yet to be proposed stock option plan whereby
Executive will be issued an option to acquire seventy-five thousand
(75,000) shares of Company’s voting common stock for $15 a
share and upon such other terms and conditions as are set forth in
a stock option agreement and plan proposed to and subsequently
adopted by the Board of Directors and approved by the shareholders
of the Company, if necessary. The stock options shall be subject to
the review of the New York Public Service Commission and the
inapplicability of the stockholders’ preemptive rights. The
Company intends to submit to the stockholders for approval at the
2007 annual meeting an amendment to the Company’s certificate
of incorporation eliminating the preemptive rights.
5
5. PROTECTION OF CONFIDENTIAL INFORMATION,
NON-SOLICITATION, NON-COMPETITION, NON-INDUCEMENT; REMEDIES; AND
EXPENSES .
5.1 Confidential
Information . The Executive agrees that at all times
hereinafter (including times during and after his term of
employment) he will not, either directly or indirectly, disseminate
or make use of any of the confidential business and technical
information of the Company or its customers, regardless of how such
information may have been acquired. Such confidential information
shall be considered to include, without limitation, all Company
policies and procedures, financial information, the identity and
lists of actual and potential customers, and any pricing used by
the Company, all to the extent that such information is not
intended for dissemination in the industry. Furthermore, the
Executive agrees that upon termination of his employment with the
Company, he will promptly return to the Company all memoranda,
notes, records, reports, manuals and other documents (and all
copies hereof) relating to the Company’s business which he
may then possess or have under his control.
5.2 Non-Competition . For a
twelve-month period immediately following his Employment Period
and/or date of employment termination whatsoever occurs first,
Executive shall not, except as permitted by Company upon its prior
written consent, enter, directly or indirectly, into the employ of
or render or engage in, directly or indirectly, any services to any
person, firm or
|
