Exhibit 10.1
EMPLOYMENT
AGREEMENT
AGREEMENT (the
“Agreement”), effective as of November 1, 2009
(the “Commencement Date”), by and between UNITIL
CORPORATION, a New Hampshire corporation (the
“Company”) and ROBERT G. SCHOENBERGER (the
“Executive”).
The Company desires to employ the
Executive and the Executive is willing to be employed by the
Company, on the terms and conditions of this Agreement.
Accordingly, in consideration of the
premises and the respective covenants and agreements of the parties
herein contained, and intending to be legally bound hereby, the
parties hereto agree as follows:
1. Employment . The Company
hereby agrees to employ the Executive, and the Executive hereby
agrees to be employed by the Company, on the terms and conditions
set forth herein.
2. Term . The employment of
the Executive under this Agreement shall commence on the
Commencement Date and shall end at the close of business on
October 31, 2012 (the “Term”).
3. Title, Duties and
Authority . The Executive shall serve as Chairman of the Board
of Directors (the “Board”) and as a member of the
Board, and as Chief Executive Officer and President of the Company,
and shall have such responsibilities and duties for the Company and
its subsidiaries consistent with the Executive’s positions as
Chairman, Board member, Chief Executive Officer and President. The
Executive shall have all of the powers and duties usually incident
to the offices of Chairman, Chief Executive Officer and President.
The Executive shall devote substantially all of his working time
and efforts to the business and affairs of the Company. The
Executive agrees that he shall resign as a Board member effective
on the date of his termination of employment with the Company;
which agreement shall survive the termination of this
Agreement.
4. Compensation and Benefits
.
(a) Base Salary . During the
Term, the Company shall pay the Executive a base salary
(“Base Salary”), payable in accordance with the
Company’s normal practice for paying base salaries to its
executive employees. The Base Salary shall initially be payable at
the rate of $456,601 per annum, and shall be subject to annual
review by the Board for discretionary periodic increases in
accordance with the Company’s compensation
policies.
(b) Bonus . The Executive
shall participate in the Company’s Management Incentive Plan
at the target rate of 50%.
(c) Employee Benefits . The
Executive shall be entitled to participate in the Company’s
Supplemental Executive Retirement Program (the “SERP”),
and all other employee benefit plans made available by the Company
(or any affiliate thereof) to all of its executives during the Term
as may be in effect from time to time.
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(d) Stock Plans . The
Executive shall be entitled to participate in any stock option,
restricted stock, phantom stock or similar plan of the Company or
any subsidiary as and to the extent provided by the Board from time
to time.
(e) Expenses . During the
Term, the Executive shall be entitled to receive prompt
reimbursement upon submission of expense claims to the Company for
all reasonable and customary expenses incurred by the Executive in
performing services hereunder, in accordance with the terms and
conditions of the Company’s expense reimbursement policy. The
Executive shall be entitled to a monthly allowance of $1,000 for
the leasing or financing by the Executive of a vehicle in
accordance with the Company’s automobile policies. The
Company shall pay for the membership in a local club.
(f) Vacations . The Executive
shall be entitled to paid vacation in accordance with the
Company’s vacation policy, subject to a minimum of four
(4) weeks of paid vacation per year. The Executive shall also
be entitled to all paid holidays and sick days given by the Company
to its executives.
(g) Taxes . The Company may
withhold from any amounts payable under this Agreement such
federal, state, local and/or other taxes as shall be required to be
withheld pursuant to any applicable law or regulation.
(h) Board Fees . The
Executive shall promptly remit to the Company any compensation
received by the Executive (including, without limitation, any fees,
equity securities or retirement benefits) for service on the board
of directors or similar governing body of any entity in which the
Company owns at least five percent of the voting equity securities,
unless the Board authorizes the Executive to retain some or all of
any such compensation. Notwithstanding the foregoing, the Executive
shall be entitled to retain any reimbursements paid to him by any
such entity of the actual out-of-pocket expenses incurred by the
Executive in attending any meeting of any such board or other
governing body. Nothing in this Section 4(h) shall be deemed
to authorize the Executive to serve on the board of directors or
similar governing body of any other entity if doing so would cause
the Executive to be in breach of his obligations under any other
provision of this Agreement.
(i) Change in Control . The
Company and the Executive have entered into a Severance Agreement
(“Severance Agreement”) dated June 30, 2008,
providing for certain compensation and benefits during and after
employment (including severance benefits) if a change in control of
the Company occurs. This Agreement shall not affect the
Executive’s rights or obligation under the Severance
Agreement and, as long as the Severance Agreement is not in effect,
the Severance Agreement shall not affect this Agreement or the
Executive’s rights or obligations under this Agreement. As
provided in the Severance Agreement, if the Severance Agreement
becomes effective due to a change in control, the Severance
Agreement shall supersede this Agreement.
5. Termination . The Company,
by action of the Board, may terminate the Executive’s
employment hereunder for any reason.
(a) If the Executive’s
employment is terminated by the Company during the Term for any
reason other than for Cause (as defined below), death, or
Disability (as defined below), or if the Executive terminates his
employment hereunder for Good Reason (as defined below), except as
otherwise provided in Section 10 hereof, the Company shall pay
to the
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Executive, as soon as practicable (but in no
event more than fifteen (15) days) after the date of
termination of employment,
(i) all accrued and unpaid salary,
bonus and expense reimbursements,
(ii) a lump sum cash payment equal
to the present value of twenty-four (24) monthly salary
payments, assuming for this purpose that (A) each monthly
salary payment would have been equal to 1 / 12
th of the
Executive’s Base Salary in effect at the time of his
employment termination (disregarding any reductions in Base Salary
that were not approved by the Executive) and (B) such monthly
salary payments would have been made on each of the 24 monthly
anniversaries of the date the Executive’s employment
terminated,
(iii) a lump sum cash payment equal
to the present value of two (2) annual bonus payments,
assuming for this purpose that (A) each such annual bonus
payment would have been equal to the average of the annual bonus
amounts received by the Executive in the two calendar years
preceding the year in which the employment termination occurs and
(B) the first annual bonus would have been paid on the last
business day of the first February following the date of employment
termination and the second annual bonus would have been paid on the
last business day of the second February following the date of
employment termination, and
(iv) a lump sum cash amount equal to
the sum of (A) the present value of the monthly cost that
would have been incurred by the Company (exclusive of the
Executive’s portion thereof and determined in good faith by
the Company) if it provided group medical, dental and life
insurance coverage to the Executive and the Executive’s
eligible dependents (at the same level and Executive cost as in
effect at the time of employment termination) for a period of two
(2) consecutive years following employment termination,
determined based on the cost of such coverage at the time of
employment termination and assuming such cost remained constant
through the coverage period, and (B) an additional payment
(the “Additional Payment”) in an amount such that,
after payment by the Executive of all Federal, State, city and
local income taxes and the Executive’s portion of all payroll
taxes imposed upon the Additional Payment, the Executive retains an
amount of the Additional Payment equal to the Federal, State, city
and local income taxes and the Executive’s portion of all
payroll taxes imposed upon the payment provided pursuant to subpart
(A) of this Section 5(a)(iv). For a period of two
(2) consecutive years following employment termination, the
Executive and the Executive’s eligible dependents shall
remain eligible to participate in the Company’s group
medical, dental and life insurance plan, in each case, that is
generally available to other senior executives of the Company;
provided, that the Executive shall pay one-hundred
(100%) percent of the cost of such coverage. The continued
coverage provided under this Section 5(a)(iv) shall not count
against the Executive’s and the Executive’s
dependent’s continuation of coverage period required under
the Consolidated Omnibus Budget Reconciliation Act of 1985, as
amended (or any similar state or local law).
For purposes of calculating the lump
sum cash payments provided by this Section 5, present value
shall be determined by using a discount factor equal to one
percentage point below the Prime Rate, compounded annually. The
“Prime Rate” shall be the base rate on corporate loans
at large U.S. money center commercial banks as reported in The
Wall Street Journal (or, if such rate is no longer published,
such other base rate on corporate loans by large money center
commercial banks in the United States to their most creditworthy
customers as published by any newspaper or periodical of general
circulation) as of the date on which termination shall have
occurred.
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(b) If the Executive terminates his
employment hereunder for any reason other than for Good Reason, if
the Executive’s employment hereunder is terminated due to the
Executive’s death, or if the Company terminates the
Executive’s employment as a result of Disability or Cause,
the Company shall have no further obligation hereunder and no
further payments (except for accrued and unpaid salary, bonus and
expense reimbursement) shall be made to the Executive.
(c) Disability . For purposes
of this Agreement, “Disability” shall mean the
Executive’s incapacity due to physical or mental illness
which, if he were to apply, would in the sole determination of the
Board entitle him to the receipt of benefits under the
Company’s long-term disability plan and if the Executive
shall not have returned to the performance of his duties hereunder
on a full-time basis within thirty (30) days after a written
Notice of Termination (as defined in Section 6(a)) is given to
the Executive by the Company.
(d) Cause . For the purposes
of this Agreement, “Cause” shall mean:
(i) the failure by the Executive to
substantially perform the Executive’s duties hereunder (other
than any such failure resulting from the Executive’s
incapacity due to physical or mental illness which shall be subject
to the provisions of Section 5(c));
(ii) the willful violation by the
Executive of any of the Executive’s material obligations
hereunder;
(iii) the willful engaging by the
Executive in misconduct which is materially injurious to the
business or reputation of the Company or any of its affiliates;
or
(iv) the Executive’s
conviction of a felony.
Notwithstanding the foregoing, the
Executive shall not be terminated for Cause without:
(A) reasonable notice to the
Executive setting forth the reasons for the Company’s
intention to terminate the Executive’s employment hereunder
for Cause;
(B) the failure of the Executive to
cure the nonperformance, violation or misconduct described in the
notice referred to in clause (A) of this paragraph, if the
cure thereof is possible,
