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EMPLOYMENT AGREEMENT

Employment Agreement

EMPLOYMENT AGREEMENT | Document Parties: Pennichuck Corporation You are currently viewing:
This Employment Agreement involves

Pennichuck Corporation

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Title: EMPLOYMENT AGREEMENT
Governing Law: New Hampshire     Date: 11/14/2006

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Exhibit 10.1

 

EMPLOYMENT AGREEMENT

 

      This Agreement, made and entered into as of the 24th day of October, 2006 by and between Duane C. Montopoli (the "Executive") of North Andover, Massachusetts, and Pennichuck Corporation (the "Corporation"), a New Hampshire corporation with principal offices in Merrimack, New Hampshire.

 

      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:

 

ARTICLE I
EMPLOYMENT

 

      1.1.    The Corporation hereby employs the Executive and the Executive hereby accepts employment with the Corporation effective as of August 21, 2006 for the Term (as defined in Section 3.1 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.

 

ARTICLE II
POSITION, DUTIES AND RESPONSIBILITIES

 

      2.1.     Position and Duties . During the Term of this Agreement, the Executive shall serve as the President, Chief Executive Officer and a director of the Corporation. Subject only to the supervision, control and guidance of the Chairman of the Board and the Board of Directors of the Corporation (the "Board"), the Executive shall have all of the duties, responsibilities and authorities typically enjoyed by a President and Chief Executive Officer of a publicly-traded corporation to control the day-to-day operations of the Corporation, including, by example but not by way of limitation, the responsibility for the overall operations of the Corporation, the supervision over the property, business and affairs of the Corporation and the power to hire and dismiss other employees. The parties acknowledge that the Executive may be listed as an employee of one of the Corporation's subsidiaries for payroll and other appropriate purposes. The Executive will also serve as a director and officer of one or more of the Corporation's subsidiaries, as directed by the Board.

 

      2.2.     Outside Activities . The Executive shall devote substantially all of his business time and attention to the business and affairs of the Corporation consistent with his executive position with the Corporation, except for vacations permitted pursuant to Section 5.4 and Disability (as defined in Section 7.5). Nothing in this Agreement, however, shall preclude the Executive from engaging in charitable activities, community affairs and corporate boards, or giving attention to his investments 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
TERM

 

      3.1.    The term of employment under this Agreement ("Term") shall be for the period commencing on August 21, 2006 ("Effective Date") and shall end upon termination pursuant to Article VII below.

 

ARTICLE IV
COMPENSATION

 

      4.1.     Base Salary . The Executive shall be paid a base salary (the "Base Salary") equal to two hundred and fifty thousand dollars ($250,000.00) 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.

 

      4.2.     Incentive Compensation . During the Term, the Executive shall generally be entitled to participate in any bonus and incentive compensation plans, as amended from time to time, that are made available to executive officers of the Corporation. The Executive shall have the opportunity to earn an annual target cash bonus of 40% of his then Base Salary as determined by the Compensation and Benefits Committee of the Board based on the Corporation's financial performance and the Executive's overall performance. Any such bonus shall be paid at the same time as such payments are ordinarily made to the executive officers of the Corporation.

 

      4.3.     Non-Qualified Stock Options . During the Term, the Executive shall generally be entitled to participate in any stock option plan or plans which may be made available by the Corporation; provided that, on the Effective Date, the Executive shall be granted forty thousand (40,000) non-qualified options to acquire common shares of the Corporation pursuant to the Corporation's existing stock option plans, with an exercise price for such 40,000 options being equal to the closing price of the Corporation's common stock as reported by NASDAQ on the trading day immediately preceding the Effective Date; said options will vest over a three year period, with one third or thirteen thousand, three hundred and thirty four options vesting at the end of calendar year 2006 and an additional one third or thirteen thousand, three hundred and thirty three options vesting at the end of each calendar year thereafter; and provided further, all of said options shall vest immediately in the event of a "Change of Control" (as that term is defined in section 7.4). The Executive may receive additional stock option grant awards at the discretion of the Board on or about the month of March of each calendar year during the Term.

 

      4.4.     Eminent Domain Case Grant . In the event of a final settlement, adjudication, or resolution of the current proceedings, docket number DW 04-048, brought by the City of Nashua to acquire the assets of one or more of the Corporation's water utility subsidiaries (the "Eminent Domain Case"), the Board shall grant to the Executive an additional thirty thousand (30,000)

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non-qualified options to acquire common shares of the Corporation, immediately exercisable at an exercise price equal to the closing price of such shares as of the trading day prior to the earlier to occur of either the date of any such event or the public announcement of any such event. Such number of options shall be adjusted for stock splits and/or recapitalizations.

 

      4.5.     Tax Withholdings . 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.

 

ARTICLE V
FRINGE BENEFIT PLANS

 

      5.1.     Employee Benefit Programs . The Executive shall be entitled to (A) receive health and dental insurance coverage, 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 current health and dental coverage during the initial 90-day waiting period imposed by the Corporation's health and dental insurance plans up to the amount the Corporation would have paid for Executive's coverage if there had been no waiting period; (B) receive group life and disability coverage, to the extent provided by the Corporation to its executive officers; (C) receive insurance on the life of the Executive in the amount of one million dollars ($1,000,000) pursuant to a life insurance policy owned by the Executive, and (D) participate in (1) all of the Corporation's current pension and other retirement plans and profit-sharing plans, and any successor plans, if any, that may hereafter be adopted and maintained by the Corporation, 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 and (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 dollars ($6,000) 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, subject to any waiting periods contained in the plan documents.

 

      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.

 

      5.3.    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;

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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.

 

      5.4.     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 two (2) weeks for calendar year 2006, and no less than four (4) weeks in any full calendar years, and pro-rated for any other 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.

 

      5.5 .     Membership . The Corporation will provide a membership for Executive at the Nashua Country Club for business use. The Corporation will reimburse Executive for all reasonable out-of-pocket expenses incurred by Executive in connection with his business duties on behalf of the Corporation.

 

      5.6.     Legal Assistance . The Corporation will reimburse the Executive for the cost of attorney's fees to have Executive's personal attorney review this Employment Agreement. The amount of such reimbursement will not exceed two thousand, five hundred dollars ($2,500.00).

 

ARTICLE VI
INDEMNIFICATION

 

      6.1.    The Executive shall be entitled, at all times, to the benefit of the maximum indemnification and advancement of expenses available from time to time under the Corporation's Articles of Incorporation and Bylaws, and under the laws of the State of New Hampshire. Such indemnification shall survive the termination of this Agreement unless such termination is for "Cause" (as that term is defined in Section 7.4). In addition, the Corporation shall have and maintain in full force and effect an officers' liability insurance policy providing such coverages, exclusions and deductibles as the Corporation and the Executive shall reasonably agree and as is available on a reasonable premium basis.

 

ARTICLE VII
TERMINATION

 

      7.1.     Termination by the Executive Without a Change of Control . The Executive may terminate his employment hereunder for any reason at any time upon at least thirty (30) days prior written notice to the Corporation. In the event the Executive terminates his employment, the Executive shall receive accrued but unpaid salary, unused vacation, bonus (if any) and benefits through the last day of employment only. Notwithstanding the foregoing


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