Preview of our top selling Change of Control Agreement
American States Water - Change-in-control Agreement
EXHIBIT 10.09
CHANGE-IN-CONTROL AGREEMENT
This Change-in-Control Agreement (the "Agreement") is dated as of October 27, 1998, and is entered into by and between Susan L. Conway (the "Executive") and Southern California Water Company, a California corporation (the "Company").
RECITALS
The Company considers it essential to the best interest of the Company and its shareholders that the Executive be encouraged to remain with the Company and continue to devote full attention to the Company's business notwithstanding the possibility, threat or occurrence of a Change in Control (as defined in Section 3). The Company believes that it is in the best interest of the Company and its shareholders to reinforce and encourage the continued attention and dedication of the Executive and to diminish inevitable distractions arising from the possibility of a Change in Control. Accordingly, to assure the Company that it will have the Executive's undivided attention and services notwithstanding the possibility, threat or occurrence of a Change in Control, and to induce the Executive to remain in the employ of the Company, and for other good and valuable consideration, the Board of Directors of the Company has, at the recommendation of its Compensation Committee, caused the Company to enter into this Agreement.
TERMS AND CONDITIONS
The Executive and the Company hereby agree to the following terms and conditions:
1. Term of Agreement
If a Change in Control (as defined in Section 3) occurs on or before the expiration date of this Agreement and while the Executive is still an employee of the Company, then this Agreement will continue in effect for two years from the date of such Change in Control and, if the Executive's employment with the Company is terminated within such two-year period, this Agreement shall thereafter continue in effect until all of the obligations of the Company under this Agreement shall have been fulfilled. If no Change in Control occurs on or before December 31, 2000, this Agreement shall expire; provided, however that this Agreement shall be automatically extended for an additional two years to December 31, 2002 if (i) a plan or agreement for a Change in Control has been approved by the Board of Directors of the Company or American States Water Company, a California corporation ("AWR"), on or before the expiration date, or (ii) the Company has not delivered to you or you shall have not delivered to the Company written notice at least 60 days prior to the expiration date that such expiration date shall not be so extended. This Agreement shall continue to be automatically extended for an additional two-year period and each succeeding two-year period if a plan or agreement for a Change in Control has been approved by the Board of Directors of the Company or AWR or the Company or the Executive fails to give the notices by the time and in the manner described in this Section 1.
2. Change in Control Date
The "Change in Control Date" shall mean the first date during the term of this Agreement on which a Change in Control (as defined in Section 3) occurs; provided, however, that if a Change in Control occurs and if the Executive's employment with the Company is terminated after approval by the Board of Directors of the Company or AWR of a plan or agreement for a Change in Control but prior to the date on which the Change in Control occurs, the "Change in Control Date" shall mean the date immediately preceding the date of such termination.
3. Change in Control
A "Change in Control" shall mean any of the following events:
(a) the dissolution or liquidation of either the
Company or AWR, unless its business is continued by another entity in which holders of AWR's voting securities immediately before the event own, either directly or indirectly, more than 50% of the continuing entity's voting securities immediately after the event;
(b) any sale, lease, exchange or other transfer (in one or a series of transactions) of all or substantially all of the assets of either the Company or AWR, unless its business is continued by another entity in which holders of AWR's voting securities immediately before the event own, either directly or indirectly, more than 50% of the continuing entity's voting securities immediately after the event;
(c) any reorganization or merger of the Company or AWR, unless the holders of AWR's voting securities immediately before the event own, either directly or indirectly, more than 50% of the continuing or surviving entity's voting securities immediately after the event;
(d) an acquisition by any person, entity or group acting in concert of more than 50% of the voting securities of the Company or AWR, unless the holders of AWR's voting securities immediately before the event own, either directly or indirectly, more than 50% of the acquirer's voting securities immediately after the acquisition; or
(e) a change of one-half or more of the members of the Board of Directors of the Company or AWR within a twelve-month period, unless the election or nomination for election by shareholders of new directors within such period constituting a majority of the applicable Board was approved by the vote of at least [two-thirds] of the directors then still in office who were in office at the beginning of the twelve-month period.
4. Effective Period
For the purpose of this Agreement, the "Effective Period" is the period commencing on the Change in Control Date and ending on the date this Agreement terminates.
5. Termination of Employment
(a) Death or Disability: The Executive's employment shall terminate automatically upon the Executive's death. If the Disability (as defined below) of the Executive occurs during the Effective Period, the Company may give the Executive written notice of its intention to terminate the Executive's employment. In such event, the Executive's employment with the Company shall terminate effective on the 30th day after receipt of such notice by the Executive (the "Disability Effective Date"), provided that, within the 30 days after such receipt, the Executive shall not have returned to full-time performance of his or her duties. For purposes of this Agreement, "Disability" shall mean the absence of the Executive from his or her duties with the Company on a full-time basis for [180] consecutive business days as a result of a physical or mental condition which prevents the Executive from performing the Executive's normal duties of employment and which is (i) determined to be total and permanent by a physician selected by the Company or its insurers and acceptable to the Executive or the Executive's legal representative and/or (ii) entitles the Executive to the payment of long-term disability benefits from the Company's or AWR's long-term disability plan commencing no later than the Disability Effective Date.
(b) Cause: The Company may terminate the Executive's employment other than for Cause or Disability during the Effective Period as provided in Section 6(a). The Company may also terminate the Executive's employment during the Effective Period for Cause. For purposes of this Agreement, "Cause" shall be limited to the following:
(i) the Executive's failure to render services
to the Company where such failure amounts to gross
neglect or gross misconduct of the Executive's
responsibility and duties,
(ii) the Executive's commission of an act of fraud
or dishonesty against the Company or any affiliate of the
Company, or
(iii) the Executive's conviction of a felony or
other crime involving moral turpitude.
(c) Good Reason: The Executive's employment may be terminated by the Executive during the Effective Period for Good Reason. For purposes of this Agreement, "Good Reason" shall mean:
(i) the assignment to the Executive of any
duties inconsistent in any respect with the Executive's
position (including status, offices, titles and reporting
requirements), authority, duties or responsibilities as in
effect on the Change in Control Date, or any other action by
the Company which results in a diminution in such position,
authority, duties or responsibilities, excluding for this
purpose an isolated, insubstantial and inadvertent action
not taken in bad faith and which is remedied by the Company
promptly after receipt of notice thereof given by the
Executive;
(ii) any failure by the Company to reappoint the
Executive to a position held by the Executive on the Change
in Control Date, except as a result of the termination
of the Executive's employment by the Company for Cause or
Disability, the death of the Executive, or the termination
of the Executive's employment by the Executive other than
for Good Reason;
(iii) reduction by the Company in the Executive's
base salary as in effect on the date hereof or as the same
may be increased from time-to-time;
(iv) the taking of any action by the Company (including
the elimination of benefit plans without providing substitutes
therefore or the reduction of the Executive's benefits
thereunder) that would substantially diminish the aggregate
value of the Executive's incentive awards and other fringe
benefits including the executive benefits and perquisites
from the levels in effect prior to the Change in Control
Date;
(v) the Company's requiring the Executive to be
based at any office or location which increases the distance
from the Executive's home to the office location by more than
[35] miles from the distance in effect as of the Change in
Control Date;
(vi) any failure by the Company to comply with and
satisfy Section 10(c) of this Agreement.
6. Obligations of the Company upon Termination
(a) Good Reason, Other Than for Cause or Disability: If the Company shall terminate the Executive's employment other than for Cause or Disability during the Effective Period, or the Executive shall terminate employment for Good Reason during the Effective Period, the Company agrees, subject to Section 8, to make the payments and provide the benefits described below:
(i) The Company shall pay to the Executive in a
cash lump sum within 10 days from the date of the Executive's
termination of employment an amount equal to the product of
(A) and (B), where (A) is two and (B) is the Executive's
annual base salary at the highest of the rate in effect at
any time during the three years preceding the date of
termination.
(ii) The Company shall also pay to the Executive in a
cash lump sum within 10 days from the date of termination an
amount equal to the sum of (A) Executive's base salary
through the date of termination, plus (B) any compensation
previously deferred by the Executive (together with any
accrued earnings or interest thereon), plus (C) any accrued
vacation pay, in each case to the extent not theretofore
paid (the amounts referred to in this paragraph (ii) are
hereinafter referred to as the "Accrued Obligations").
(iii) The Company shall also pay to the Executive in a
cash lump sum within 10 days from the date of termination an
amount equal to the excess of (A) over (B), where (A) is
equal to the single sum actuarial equivalent of what would
be the Executive's accrued benefits under the terms of the
Southern California Water Company Pension Plan (or any
successor thereto), including any supplemental retirement
plan providing additional pension benefits, (hereinafter
together referred to as the "Pension Plan") at time of the
Executive's termination of employment, without regard to
whether such benefits are "vested" thereunder, if the
Executive were credited with an additional two years of
continuous service after the termination of Executive's
employment with the Company at the Executive's highest
annual rate of compensation covered by such Pension Plan
within the three years preceding the date of the termination
of the Executive's employment with the Company and (B) is
equal to the single sum actuarial equivalent of the
Executive's accrued benefits under the Pension Plan at the
time of the Executive's termination of employment. The
payment under this paragraph (iii) shall not extinguish any
rights the Executive has to benefits under the Pension Plan.
For purposes of this paragraph, "actuarial equivalent" shall
be determined using the actuarial assumptions used under the
Pension Plan for determining the actuarial equivalence of
different annuity forms of benefits. In no event shall the
additional two years of continuous service referred to above
cause the Executive to be deemed to be older than the
Executive's actual age for any purpose under this Agreement.
(iv) For two years after the Executive's date of
termination, or such longer period as may be provided by the
terms of the appropriate plan, program, practice or policy,
the Company shall continue to provide welfare benefits and
fringe benefits and other perquisites to the Executive
and/or the Executive's family at least equal to those which
would have been provided to them if the Executive's
employment had not been terminated (in accordance with the
most favorable plans, practices, programs or policies of the
Company and its affiliates applicable generally to other
peer executives and their families immediately preceding the
date of the Executive's termination of employment);
provided, however, that if the Executive becomes employed by
another employer and is eligible to receive medical or other
welfare benefits under another employer-provided plan, the
medical and other welfare benefits described herein shall be
secondary to those provided under such other plan during
such applicable period of eligibility. For purposes of
determining eligibility (but not the time of commencement of
benefits) of the Executive for any retiree benefits pursuant
to such plans, practices, programs and policies, the
Executive shall be considered to have remained employed
until two years after the date of termination of employment
and to have retired on the last day of such period.
Following the period of continued benefits referred to in
this subsection, the Executive and the Executive's family
shall be given the right provided in Section 4980B of the
Internal Revenue Code of 1986, as amended (the "Code"), to
elect to continue benefits in all group medical plans. In
the event that the Executive's participation in any of the
plans, programs, practices or policies of the Company
referred to in this subsection is barred by the terms of
such plans, programs, practices or policies, the Company
shall provide the Executive with benefits substantially
similar to those which the Executive would be entitled as a
participant in such plans, programs, practices or policies.
At the e...
View agreement details