SEPARATION AND RELEASE
AGREEMENT
This Separation
and Release Agreement (“Agreement”) is made by and
between NEW JERSEY RESOURCES CORPORATION (“THE
COMPANY”) and TIMOTHY C. HEARNE
(“EMPLOYEE”).
A. For
purposes of this Agreement, “THE COMPANY” means NEW
JERSEY RESOURCES CORPORATION and each and any of its parent and
subsidiary corporations, affiliates, departments, divisions, and/or
joint ventures.
B. EMPLOYEE
has been employed by THE COMPANY as Senior Vice President and
Treasurer.
C. As a
result of EMPLOYEE’s separation from THE COMPANY, and to
fully and finally resolve all issues concerning EMPLOYEE’s
employment relationship with THE COMPANY, THE COMPANY and EMPLOYEE
have decided to enter into this Agreement.
D. For and in
consideration of the mutual promises and covenants in this
Agreement, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the
parties agree as follows:
1.
Separation of Employment . THE COMPANY and EMPLOYEE agree
that EMPLOYEE shall separate from THE COMPANY effective at the end
of business on August 31, 2006 (“Separation
Date”). At all relevant times, EMPLOYEE’s employment
with THE COMPANY was at will and terminable at any time by EMPLOYEE
or by THE COMPANY with or without reason or notice.
2.
Earned Salary and Vacation . THE COMPANY shall make a
lump-sum payment to EMPLOYEE, at the next payroll cycle after the
Separation Date, in the amount of six thousand six hundred fifty
four dollars and 85 cents ($6,654.85), representing all unused,
earned and accrued vacation time that EMPLOYEE was entitled to
while employed at THE COMPANY. This payment shall be subject to all
appropriate federal and state withholding and employment taxes.
EMPLOYEE acknowledges and agrees that upon receipt of such payments
as identified in this paragraph he will have been paid in full for
all work performed, will have received all payments for which he
might otherwise have been eligible, and will have been paid for all
unused, earned and accrued vacation time and is entitled to no
further payments from THE COMPANY whatsoever.
(a)
Severance . In consideration for EMPLOYEE’s execution
of and compliance with this Agreement, and no earlier than the
eighth (8 th
) day after said execution, THE
COMPANY agrees to pay EMPLOYEE severance pay equal to sixteen
(16) months of his salary, in a lump-sum payment of two
hundred thirty eight thousand seven hundred dollars ($238,700.00).
This severance shall be subject to all appropriate federal and
state withholding and employment taxes. EMPLOYEE agrees and
acknowledges that this severance payment is greater than any
severance benefit that he may otherwise be entitled to under any of
THE COMPANY’s policies or procedures. EMPLOYEE hereby agrees
that he is entitled to no other severance amount from THE
COMPANY.
(b)
Bonus . In consideration for EMPLOYEE’s execution of
and compliance with this Agreement, and no earlier than the eighth
(8 th
) day after said execution, THE
COMPANY agrees to pay EMPLOYEE sixty two thousand six hundred fifty
dollars ($62,650.00), which monies constitute the 2006 annual
incentive bonus payment for which EMPLOYEE would have been eligible
if his employment with THE COMPANY had continued and in the event
EMPLOYEE and THE COMPANY met the requisite performance standards
and incentives for said bonus distribution. This payment shall be
subject to all appropriate federal and state withholding and
employment taxes.
(c)
Benefits/Termination. As further consideration for
EMPLOYEE’s execution of and in compliance with this
Agreement, THE COMPANY agrees to pay the premium costs of
EMPLOYEE’s current Medical and Dental coverage through COBRA
for a period of eighteen months from August 31, 2006, which is
the date that EMPLOYEE’s Medical and Dental coverage would be
terminated under THE COMPANY’s policies and procedures. All
other benefits, including but not limited to group life insurance
and long term disability insurance coverage, but excepting those in
which EMPLOYEE has vested rights under the terms of an employee
benefit plan such as THE COMPANY pension and 401K plans, terminate
as of EMPLOYEE’s Separation Date.
(d)
Sufficiency of Consideration. No Admission of Liability .
The parties agree that the consideration paid to EMPLOYEE is good
and sufficient consideration for this Agreement. The parties
further agree that these amounts are greater than what EMPLOYEE is
entitled to receive under THE COMPANY’s policies, any other
verbal or written agreement between the parties, and applicable
law. EMPLOYEE acknowledges that neither this Agreement, nor payment
of any consideration pursuant to this Agreement, shall be taken or
construed to be an admission or concession of any kind with respect
to alleged liability or alleged wrongdoing by THE
COMPANY.
4.
Stock Options. At the time of his separation from THE
COMPANY, EMPLOYEE had forty nine thousand two hundred fifty
(49,250) fully vested options. In accordance with the New Jersey
Resources Corporation Stock Option Award Agreement, and the
permitted modification of terms thereunder, EMPLOYEE’S vested
options must be exercised within one hundred eighty (180) days
from the date of his separation from THE COMPANY.
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Any unvested
options held by EMPLOYEE at the time of his separation are
automatically cancelled pursuant to the New Jersey Resources
Corporation Stock Option Award Agreement.
5.
Deferred Compensation.
(a) In
accordance with THE COMPANY’S Officers’ Deferred
Compensation Plans (effective, respectively, as of March 19,
1999, as amended May 16, 2006; and as of January 1, 2005,
as amended May 16, 2006), EMPLOYEE acknowledges that he must
accept a lump sum distribution six (6) months from his
Separation Date.
(b) In
accordance with THE COMPANY’S Executive Employee Retirement
Agreement dated January 1, 1986 and all amendments thereto
(the most recent of which amendments was effective January 1,
1997), EMPLOYEE acknowledges that he may elect (1) to receive
the Cumulative Termination Benefit of fifty five thousand dollars
fifteen cents ($55,000.15) over no less than sixty
(60) consecutive months commencing the first month after
EMPLOYEE’s sixty fifth (65th) birthday or (2) by written
notice within thirty (30) days of the Separation Date to
receive a lump-sum payment of twenty seven thousand five hundred
dollars and eight cents ($27,500.08), which amount shall be paid in
two (2) installments: twenty two thousand eight hundred thirty
three dollars and forty three cents ($22,833.43) on or before
twenty one (21) days following receipt by THE COMPANY of the
election; and four thousand six hundred sixty six dollars and sixty
five cents ($4,666.65) no later than January 15, 2007. In the
event EMPLOYEE elects payment pursuant to paragraph 5(b)(2) herein,
no further or additional payments to him are due or shall be made
under the Executive Employee Retirement Agreement.
6.
General Release and Waiver of Claims . EMPLOYEE, in
consideration of the promises and covenants made by THE COMPANY in
this Agreement, hereby knowingly and voluntarily compromises,
settles and releases THE COMPANY from any and all past, present, or
future claims, demands, obligations, or causes of action, whether
based on tort, contract, statutory or other theories of recovery
for anything that has occurred up to and including the date of
EMPLOYEE’s execution of this Agreement. Such claims include
those EMPLOYEE may have or has against THE COMPANY, or which may
later accrue to or be acquired by EMPLOYEE against THE COMPANY and
its predecessors, successors in interest, assigns, parent and
subsidiary organizations, affiliates, and partners, and its past,
present, and future officers, directors, shareholders, agents, and
employees, and their heirs and assigns. EMPLOYEE specifically
agrees to release and waive all claims for wrongful termination and
any claim for retaliation or discrimination in employment under
federal or state law or regulation including, but not limited to,
discrimination based on age, sex, race, disability, handicap,
national origin or any claims under Title VII of the Civil Rights
Act of 1964, the Age Discrimination in Employment Act of 1967, as
amended by the Older Workers’ Benefits Protection Act (ADEA),
the Americans with Disabilities Act of 1990 (ADA), the Consolidated
Omnibus Budget Reconciliation Act (COBRA), the Employee Retirement
Income Security Act (ERISA), the Immigration Reform and Control Act
(IRCA), the Fair Labor Standards Act (FLSA), the Family Medical
Leave Act (“FMLA”), the New Jersey Law Against
Discrimination (LAD), the New
3
Jersey
Conscientious Employee Protection Act (CEPA), the New Jersey Family
Leave Act (“NJFLA”), the New Jersey Wage and Hour and
Wage Payment laws, and/or any other federal, state, or local law
(statutory or decisional), regulation, or ordinance, up to and
including the Effective Date of this Agreement.
7.
Covenant Not to Sue . EMPLOYEE represents and agrees that
EMPLOYEE has not filed any lawsuits or arbitrations against THE
COMPANY, or filed or caused to be filed any charges or complaints
against THE COMPANY with any municipal, state or federal agency
charged with the enforcement of any law or any self-regulatory
organization. EMPLOYEE agrees, not inconsistent with EEOC
Enforcement Guidance or Non-Waivable Employee Rights Under
EEOC-Enforced Statutes dated April 11, 1997, and to the fullest
extent permitted by laws, not to sue or file a charge, complaint,
grievance or demand for arbitration against THE COMPANY in any
claim, arbitration, suit, action, investigation or other proceeding
of any kind which relates to any matter that involved THE COMPANY,
and that occurred up to and including the date of EMPLOYEE’s
execution of this Agreement, un
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