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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report:
November 5, 2024
MIDDLESEX WATER COMPANY
(Exact name of registrant as specified
in its charter)
| New Jersey |
000-00422 |
22-1114430 |
| (State or other jurisdiction of |
(Commission |
(I.R.S. Employer |
| incorporation or organization) |
File Number) |
Identification No.) |
485C Route 1 South, Suite 400, Iselin,
New Jersey 08830
(Address of Principal Executive Offices)
(Zip Code)
732-634-1500
(Registrant’s telephone number,
including area code)
Check the appropriate box below if the Form 8-K filing is intended
to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ |
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ☐ |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered |
| Common
Stock, No Par Value |
MSEX |
The NASDAQ Stock Market, LLC |
Indicate by check mark whether the
registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter)
or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the
registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards
provided pursuant to Section 13(a) of the Exchange Act. ☐
Item
5.02 Departure of directors or certain officers; election of directors; appointment of certain officers; compensatory arrangements of
certain officers
(e) On November 1, 2024, pursuant to each Change in Control Agreement
in place between the Middlesex Water Company (the “Company”) on the one hand and each of the following executives: Jay Kooper,
Lorrie Ginegaw, Robert Fullagar, Georgia Simpson, Robert Capko (Messrs. Capko, Fullagar, and Kooper, and Mses. Ginegaw and Simpson, collectively,
the “Executives”), Bernadette Sohler and G. Christian Andreasen, the Company gave notice to each individual that the Change
in Control Agreement with such individual would not be extended past December 31, 2024.
On November 1, 2024, the Company entered into a Change in Control Agreement
with each Executive (such agreements collectively, the “2025 Change in Control Agreements”). The term of the 2025 Change in
Control Agreements commences on January 1, 2025, following the expiration of the existing Change in Control Agreements on December 31,
2024.
On November 4, 2024, the Company and President and Chief Executive
Officer Nadine Leslie entered into an agreement to amend the current Change in Control Agreement in place between the Company and Ms.
Leslie (“Change in Control Amendment”).
Each 2025 Change in Control Agreement and the Change in Control Agreement
with Ms. Leslie, as amended by the Change in Control Amendment, provides severance benefits to the employee party to such agreement in
the event of employment termination following a change in control of the Company. Each agreement specifies that the executive will receive
compensation, including a lump sum payment and continuation of certain benefits, if their employment is terminated without cause or if
they resign for good reason within two years after a change in control, as defined by criteria specified in the agreement, such as an
acquisition of a significant portion of company shares or changes in the board of directors. A copy of each 2025 Change in Control Agreement
and of the Change in Control Amendment is filed herein.
Item 9.01 Financial Statements and Exhibits.
(c) Exhibits
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf of the undersigned hereunto duly authorized.
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MIDDLESEX WATER COMPANY |
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(Registrant) |
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/s/Mohammed G. Zerhouni |
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Mohammed G. Zerhouni |
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Sr. Vice President, Chief Financial Officer |
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and Treasurer |
Dated: November 5, 2024
Exhibit 10.1
CHANGE IN CONTROL AGREEMENT
This Change in Control Termination Agreement (the
“CIC Agreement”) is entered into as of November 1, 2024, between Middlesex Water Company (the “Company”),
a New Jersey corporation, and Jay Kooper (referred to as “You” in this CIC Agreement).
Recitals
| A. | The Company considers it essential to the best interests of its shareholders to foster the continuous employment of key management
personnel. In this connection, the Board of Directors of the Company (the “Board”) recognizes that, as is the case with many
publicly held Companies, the possibility of a Change in Control may exist. This possibility, and the uncertainty and questions that it
may raise among management, may result in the departure or distraction of management personnel to the detriment of the Company and its
shareholders. |
| B. | The Board has determined that appropriate steps should be taken to reinforce and encourage the continued attention and dedication
of members of the Company’s management, including You, to the assigned duties without distraction in the face of circumstances arising
from the possibility of a Change in Control of the Company. |
| C. | To induce You to remain in the employ of the Company, while simultaneously representing the best interests of the Company’s
shareholders, and in consideration of your agreement set forth below, the Company agrees that You shall receive the severance benefits
set forth in this CIC Agreement in the event your employment with the Company is terminated by the Company, or is terminated by You for
“Good Reason,” as defined herein, in connection with a “Change in Control of the Company” (as defined in Section
2 below). |
Therefore, in consideration of your continued employment
and the parties’ agreement to be bound by the terms contained in this CIC Agreement, the parties agree as follows:
| 1. | Term of CIC Agreement. This CIC Agreement shall commence as January 1, 2025. However, commencing on December
31, 2025, and each December 31 afterwards, the term of this Agreement shall automatically be extended for one (1) additional year unless,
no later than the preceding November 1st, the Company shall have given notice that it does not wish to extend this Agreement. Notwithstanding
the foregoing, if a Change in Control of the Company shall be proposed to occur, or have occurred, during the original or any extended
term of this CIC Agreement, this CIC Agreement shall continue in effect until your termination of employment with the Company or its successor
or, when all amounts due under this CIC Agreement following a termination have been paid, whichever is later. |
| 2. | Change In Control. No benefits shall be payable under this CIC Agreement unless there shall have been a Change in Control
of the Company, as set forth herein. For purposes of this CIC Agreement, a “Change in Control” of the Company shall be deemed
to occur if any party or group acquires beneficial ownership of 20 percent or more of the voting shares of the Company; or if shareholder
approval is obtained for a transaction involving the acquisition of the Company through the purchase or exchange of the stock or assets
of the Company by merger or otherwise; or if more than one-third of the Board elected in a 12-month period or less are so elected without
the approval of a majority of the Board as constituted at the beginning of such period; or a liquidation or dissolution of Company. |
| 3. | Termination Following Change In Control. If any of the events described in Section 2 above constituting a Change in
Control of the Company shall have occurred, then unless the termination is (A) because of your death, Disability or Retirement, (B) by
the Company for Cause, or (C) by You other than for Good Reason, on the subsequent termination of your employment during the term of this
CIC Agreement, You shall be entitled to the severance benefits provided in Section 4.3 below if such termination occurs on or before the
second (2nd) anniversary of the Change in Control date (the “Change in Control Period”). If such termination occurs
before the Change in Control Date, You shall not be entitled to receive severance benefits under this CIC Agreement. |
3.1 Disability. If, as
a result of your incapacity due to physical or mental illness during the Change in Control Period You shall have been absent from the
full-time performance of your duties with the Company for six consecutive months, and within 30 days after written notice of termination
is given You shall not have returned to the full-time performance of your duties, your employment may be terminated for "Disability"
whereby, You would not be entitled to receive severance benefits in relation to a Change in Control.
3.2 Cause. Termination
by the Company of your employment for "Cause" shall mean termination as a result of:
3.2.1 The willful and continued failure
by You to substantially perform your duties with the Company as such employment was performed by You prior to the Change in Control or
any such actual or anticipated failure after the issuance by You of a Notice of Termination for Good Reason as defined herein after a
written demand for substantial performance is delivered to You by the Board of Directors, which demand specifically identifies the manner
in which the Board believes that You have not substantially performed your duties; or
3.2.2 The willful act by You in conduct
that is demonstrably and materially injurious to the Company, and which the Board deems to cause or will cause substantial economic damage
to the Company or injury to the business reputation of the Company, monetarily or otherwise. For purposes of this Section, no act, or
failure to act, on your part shall be deemed “willful" unless done, or omitted to be done, by You not in good faith and without
a reasonable belief that your action or omission was in the best interest of the Company. Notwithstanding the foregoing, You shall not
be deemed to have been terminated for Cause unless and until there shall have been delivered to You a copy of a resolution duly adopted
by the affirmative vote of not less than three-quarters of the entire membership of the Board at a meeting of the Board called and held
for such purpose (after reasonable notice to You and an opportunity for You, together with your counsel, to be heard before the Board),
finding that in the good faith opinion of the Board You were guilty of conduct set forth above in clauses 3.2.1 or 3.2.2 of this Section
and specifying the particulars in detail.
3.3 CIC Good Reason. You
shall be entitled to receive severance benefits as provided in this CIC Agreement if You terminate your employment with the Company for
“Good Reason.” For purposes of this CIC Agreement, "CIC Good Reason" shall mean, without your consent, the occurrence
in connection with a Change in Control of the Company of any of the following circumstances unless, in the case of Sections 3.3.1, 3.3.5,
3.3.6, 3.3.7, or 3.3.8, the circumstances are fully corrected prior to the Date of Termination specified in the Notice of Termination,
as defined in Sections 3.5 and 3.4, respectively, given in respect of them. If You terminate your employment with the Company for Good
Reason, as provided below, your employment with the Company shall be considered to have been involuntarily terminated by the Company:
3.3.1 The assignment to You of any significant
employment duties which are inconsistent with your status and position (i) prior to the Change in Control where such change is a direct
result of any pending Change in Control; or (ii) as such status exists immediately prior to the Change in Control of the Company, or (iii)
which are a substantial adverse alteration in the nature or status of your responsibilities from those in effect immediately prior to
the Change in Control of the Company whichever is applicable;
3.3.2 A reduction by the Company in your
annual base salary or participation in any incentive compensation programs as in effect on the initial date of this CIC Agreement, or
as same may be increased from time to time irrespective of future Company policies including any across-the-board salary reductions similarly
affecting all key employees of the Company;
3.3.3 Your relocation, without your consent,
to an employment location not within twenty-five (25) miles of your present designated office or job location, except for required travel
on the Company's business to an extent substantially consistent with your present business travel obligations;
3.3.4 The failure by the Company, without
your consent, to pay to You any part of your current compensation, or to pay to You any part of an installment of deferred compensation
under any deferred compensation program of the Company, within fourteen (14) days of the date the compensation is due;
3.3.5 The failure by the Company to continue
in effect any bonus to which You were entitled, or any compensation plan in which You participate (i) prior to the Change in Control where
such change is a direct result of any pending Change in Control, or (ii) immediately prior to the Change in Control of the Company that
is material to your total compensation, including but not limited to the Company's Restricted Stock Plan, 401(k) Plan, and other Benefit
Plans, or any substitute plans adopted prior to the Change in Control of the Company for which you are entitled under a separately executed
employment agreement, unless an equitable arrangement (embodied in an ongoing substitute or alternative plan) has been made with respect
to the plan, or the failure by the Company to continue your participation in it (or in such substitute or alternative plan) on a basis
not materially less favorable, both in terms of the amount of benefits provided and the level of your participation relative to other
participants, as existed at the time of the Change in Control;
3.3.6 The failure by the Company to continue
to provide You with (i) benefits substantially similar to those enjoyed by You under any of the Company's life insurance, medical, health
and accident, or disability plans in which You were participating at the time of the Change in Control of the Company was in effect for
the employees of the Company generally at the time of the Change in Control, (ii) the failure to continue to provide You with a Company
automobile or allowance in lieu of it at the time of the Change in Control of the Company, (iii) the taking of any action by the Company
that would directly or indirectly materially reduce any of such benefits or deprive You of any material fringe benefit enjoyed by You
at the time of the Change in Control of the Company, or (iv) the failure by the Company to provide You with the number of paid vacation
days to which You are entitled with the Company's normal vacation policy or other vacation allowance provided to you by written agreement
in effect at the time of the Change in Control of the Company;
3.3.7 The failure of the Company to obtain
a satisfactory agreement from any successor to assume and agree to perform this CIC Agreement, as contemplated in Section 5 of this CIC
Agreement; or
3.3.8 Any purported termination of your
employment that is not effected pursuant to a Notice of Termination satisfying the requirements of Section 3.4 below (and, if applicable,
the requirements of Section 3.2 above); for purposes of this CIC Agreement, no such purported termination shall be effective.
3.3.9 You cannot terminate your employment
for Good Reason unless You have provided written notice to the Company of the existence of the circumstances providing grounds for termination
for Good Reason within 90 days of the initial existence of such grounds and the Company has had at least 30 days from the date on which
such notice is provided to cure such circumstances, if curable. If You do not provide your Notice of Termination as set forth in Section
3.4 for Good Reason within 90 days after the first occurrence of the applicable grounds, then You will be deemed to have waived your right
to terminate for Good Reason with respect to such grounds.
3.4 Notice of Termination.
Any purported termination of your employment by the Company or by You shall be communicated by written Notice of Termination to the other
party to this CIC Agreement in accordance with Section 6 of this CIC Agreement. For purposes of this CIC Agreement, a "Notice of
Termination" shall mean a notice that shall indicate the specific termination provision in this CIC Agreement relied on and shall
set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of your employment under the provision
so indicated. Your rights to terminate your employment pursuant to this Section shall not be affected by your incapacity due to Disability.
In the event You deliver Notice of Termination based on circumstances set forth in Sections 3.3.1, 3.3.5, 3.3.6, 3.3.7, or 3.3.8 above,
which are fully corrected prior to the Date of Termination set forth in your Notice of Termination, the Notice of Termination shall be
deemed withdrawn and of no further force or effect.
3.5 Date of Termination, etc.
"Date of Termination" shall mean (A) if your employment is terminated for Disability, 30 days after Notice of Termination is
given (provided that You shall not have returned to the full-time performance of your duties during such 30-day period), and (B) if your
employment is terminated pursuant to Section 3.2 or 3.3 above or for any other reason (other than Disability), the date specified in the
Notice of Termination (which, in the case of a termination pursuant to Section 3.2 above shall not be less than 30 days, and in the case
of a termination pursuant to Section 3.3 above shall not be less than 30 nor more than 60 days, respectively, from the date the Notice
of Termination is given). However, if within 15 days after any Notice of Termination is given, or, if later, prior to the Date of Termination
(as determined without regard to this provision), the party receiving the Notice of Termination notifies the other party that a dispute
exists concerning the termination, then the Date of Termination shall be the date on which the dispute is finally determined, either by
mutual written agreement of the parties, by a binding arbitration award, or by a final judgment, order, or decree of a court of competent
jurisdiction (which is not appealable or with respect to which the time for appeal has expired and no appeal has been perfected). The
Date of Termination shall be extended by a notice of dispute only if the notice is given in good faith and the party giving the notice
pursues the resolution of the dispute with reasonable diligence. Notwithstanding the pendency of any such dispute, the Company will continue
to pay You your full compensation in effect when the notice giving rise to the dispute was given (including, but not limited to, base
salary) and continue You as a participant in all compensation, benefit, and insurance plans in which You were participating when the notice
giving rise to the dispute was given, until the dispute is finally resolved in accordance with this Section. Amounts paid under this Section
are in addition to all other amounts due under this CIC Agreement and shall not be offset against or reduce any other amounts due under
this CIC Agreement.
4. Compensation on Termination or During Disability.
Following a Change in Control of the Company, as defined by Section 2, on termination of your employment or during a period of Disability
You shall be entitled to the following benefits:
4.1 During any period that You fail to
perform your full-time duties with the Company as a result of incapacity due to Disability, You shall continue to receive your base salary
at the rate in effect at the commencement of any such period, together with all amounts payable to You under any compensation plan of
the Company during the period, until this CIC Agreement is terminated pursuant to section 3.1 above. Thereafter, or in the event your
employment shall be terminated by the Company or by You for Retirement, or by reason of your death, your benefits shall be determined
under the Company's retirement, insurance, and other compensation programs then in effect in accordance with the terms of those programs.
4.2 If your employment shall be terminated
by the Company for Cause or by You other than for Good Reason, Disability, death, or Retirement during a Change In Control Period, the
Company shall pay You your full base salary through the Date of Termination at the rate in effect at the time Notice of Termination is
given, plus all other amounts and benefits to which You are entitled under any compensation plan of the Company at the time the payments
are due. The Company shall have no obligations to You under this CIC Agreement.
4.3 On or before the second anniversary
of the Change In Control, if your employment by the Company shall be terminated (a) by the Company other than for Cause or Disability,
or (b) by You for Good Reason (as defined in Section 3.3 herein), then You shall be entitled to the benefits provided below:
4.3.1 The Company shall pay You your full
salary through the Date of Termination at the rate in effect at the time Notice of Termination is given, plus all other amounts and benefits
to which You are entitled under any compensation plan of the Company, at the time the payments are due, except as otherwise provided below.
4.3.2 In lieu of any further salary payments
to You for periods subsequent to the Date of Termination, the Company shall pay to You, as severance pay the following: (i) a lump sum
severance payment equal to two (2) times the average of your Compensation for the five (5) years prior to the occurrence of the circumstance
giving rise to the Notice of Termination (or if employed less than 5 years, the average annualized Compensation of the period worked to
date), plus (ii) the amounts in the forms set forth in paragraphs 4.3.3, 4.3.4 and 4.3.5 (the “Severance Payments”). Such
Severance Payments are further subject to any limitations which may apply in the context of a Change in Control as referenced in a separately
executed Employment Agreement.
4.3.3 If permitted under the terms of such
plans, the Company shall continue coverage for You and your dependents under any health or welfare benefit plan under which You and your
dependents were participating prior to the Change in Control for a period ending on the earlier to occur of (i) the date You become
covered by a new employer’s health and welfare benefit plan, (ii) the date You become covered by Medicare, or (iii) the date which
is twenty-four (24) months from the Date of Termination. The coverage for your dependents shall end earlier than (i), (ii) or (iii) if
required by the health or welfare benefit plan due to age eligibility.
4.3.4 The Company shall pay to You any
deferred compensation, including, but not limited to deferred bonuses, allocated or credited to You or your account as of the Date of
Termination.
4.3.5 Outstanding stock options or Restricted
Stock grants, if any, granted to You under the Company's Stock Plans which are not vested on Termination shall immediately vest.
4.3.6 Where You shall prevail in any action
against the Company to recover benefits hereunder, the Company shall also pay to You all reasonable legal and accounting fees and expenses
incurred by You as a result of the termination, including all such fees and expenses incurred by You as a result of the termination, (including
all such fees and expenses, if any, incurred in contesting or disputing any termination or in seeking to obtain or enforce any right or
benefit provided by this CIC Agreement or in connection with any tax audit or proceeding to the extent attributable to the application
of Code Section 4999 to any payment or benefit provided under this CIC Agreement) or any other agreement with the Company.
4.3.7 The amount of Severance Payments
due to You under this or any other relevant agreement with the Company shall be determined by the Board in its reasonable discretion.
The payments provided for in Paragraphs 4.3.2, 4.3.4 and 4.3.5 above, shall be made no later than the thirtieth (30th) day
following the Date of Termination. However, if the amounts of the payments cannot be finally determined on or before that day, the Company
shall pay to You on that day an estimate, as determined in good faith by the Company, of the minimum amount of such payments and shall
pay the remainder of those payments (together with interest at the rate provided in Section 1274(b)(2)(B) of the Code) as soon as the
amount can be determined but in no event later than two and a half months after the Date of Termination. In the event that the amount
of the estimated payments exceeds the amount subsequently determined to have been due, the excess shall constitute a loan by the Company
to You payable on the 30th day after demand by the Company (together with interest at the rate provided in Section 1274(b)(2)(B) of the
Code).
4.4 For purposes
of this CIC Agreement:
4.4.1 If your employment is terminated
in connection with the Change in Control “Compensation” shall mean two (2) times Your base salary plus two (2) times Your
targeted annual equity grant.
4.5 You shall not be required to mitigate the amount
of any payment provided for in this Section 4 by seeking other employment or otherwise, nor shall the amount of any payment or benefit
provided for in this Section 4 be reduced by any compensation earned by You as the result of employment by another employer, by retirement
benefits, by offset against any amount claimed to be owed by You to the Company, or otherwise except as specifically provided in this
Section 4.
4.6 In addition to all other amounts payable to You
under this Section 4, You shall be entitled to receive all qualified benefits payable to You under the Company's 401(k) Plan, Defined
Benefit Plan and any other plan or agreement relating to retirement benefits, in accordance with the terms of those Plans, to the extent
you were a participant in such Plan or Plans as of the date of a Change in Control.
5. Successors; Binding Agreement.
5.1 The Company will require any successor (whether
direct or indirect, by purchase, merger, consolidation, or otherwise) to all or substantially all of the business and/or assets of the
Company to expressly assume and agree to perform this CIC Agreement in the same manner and to the same extent that the Company would be
required to perform it if no such succession had taken place. Failure of the Company to obtain the assumption and agreement prior to the
effectiveness of any succession shall be a breach of this CIC Agreement and shall entitle You to compensation from the Company in the
same amount and on the same terms as You would have been entitled to under this CIC Agreement if You had terminated your employment for
Good Reason following a Change in Control of the Company, except that for purposes of implementing the foregoing, the date on which any
such succession becomes effective shall be deemed the Date of Termination.
5.2 This CIC Agreement shall inure to the benefit
of, and be enforceable by, your personal or legal representatives, executors, administrators, heirs, distributees, and legatees. If You
should die while any amount would still be payable to You if You had continued to live, all such amounts, unless otherwise provided in
this CIC Agreement, shall be paid in accordance with the terms of this CIC Agreement to your legatee or other designee or, if there is
no such designee, to your estate.
6. Notice For the purpose of this
CIC Agreement, all notices and other communications provided for in the CIC Agreement shall be in writing and shall be deemed to have
been duly given when delivered or mailed by United States registered or certified mail, return receipt requested, postage prepaid, addressed
to the respective addresses set forth on the first page of this CIC Agreement, provided that all notices to the Company shall be directed
to the attention of the Board with a copy to the President of the Company, or to such other address as either party may have furnished
to the other in writing in accordance this CIC Agreement, except that notice of a change of address shall be effective only on receipt.
7. Section 409A
7.1 This CIC Agreement is intended to comply with
Code Section 409A or an exemption thereunder and shall be construed and administered in accordance with Code Section 409A. Notwithstanding
any other provision of this CIC Agreement, payments provided under this CIC Agreement may only be made upon an event and in a manner that
complies with Code Section 409A or an applicable exemption. Any payments under this CIC Agreement that may be excluded from Code Section
409A either as separation pay due to an involuntary separation from service or as a short-term deferral shall be excluded from Code Section
409A to the maximum extent possible. For purposes of Code Section 409A, each installment payment provided under this CIC Agreement shall
be treated as a separate payment. Notwithstanding the foregoing, the Company makes no representations that the payments and benefits provided
under this CIC Agreement comply with Code Section 409A and in no event shall the Company be liable for all or any portion of any taxes,
penalties, interest, or other expenses that may be incurred by a Participant on account of non-compliance with Code Section 409A.
7.2 Notwithstanding any other provision of this CIC
Agreement, any Severance Payment under this CIC Agreement that (i) is determined to constitute “nonqualified deferred compensation”
within the meaning of Code Section 409A and (ii) is to be made under this CIC Agreement upon the Date of Termination shall only be made
upon a “separation from service” under Code Section 409A.
7.3 Notwithstanding any other provision of this CIC
Agreement, if any Severance Payment (i) is determined to constitute “nonqualified deferred compensation” within the meaning
of Code Section 409A and (ii) You are determined to be a “specified employee” as defined in Code Section 409A(a)(2)(b)(i),
then such Severance Payment shall not be paid until the first payroll date to occur following the six-month anniversary of Your “separation
from service” or, if earlier, on Your death (the “Specified Employee Payment Date”). The aggregate of any payments that
would otherwise have been paid before the Specified Employee Payment Date shall be paid to You in a lump sum on the Specified Employee
Payment Date and thereafter, any remaining payments shall be paid without delay in accordance with their original schedule.
8. Miscellaneous
8.1 No provision of this CIC Agreement may be modified,
waived, or discharged unless the waiver, modification, or discharge is agreed to in writing and signed by You and such officer as may
be specifically designated by the Board.
8.2 No waiver by either party to this CIC Agreement
at any time of any breach by the other party of, or compliance with, any condition or provision of this CIC Agreement to be performed
by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent
time.
8.3 No agreements or representations, oral or otherwise,
express, or implied, with respect to the subject matter of this CIC Agreement have been made by either party that are not expressly set
forth in this CIC Agreement.
8.4 Nothing in this CIC Agreement is intended to
reduce any benefits payable to You under any other agreement You may have with the Company or in any Company plan in which You may participate.
8.5 The validity, interpretation, construction, and
performance of this CIC Agreement shall be governed by the law of New Jersey without reference to its conflict of laws principles.
8.6 All references to sections of the Exchange Act
or the Code shall be deemed also to refer to any successor provisions to such sections. Any payments provided for shall be paid net of
any applicable withholding or deduction required under federal, state or local law.
8.7 The obligations of the Company under Section
4 shall survive the expiration of the term of this CIC Agreement.
9. Validity. The validity or enforceability
of any provision of this CIC Agreement shall not affect the validity or unenforceability of any other provision of this CIC Agreement,
which shall remain in full force and effect.
10. Counterparts. This CIC Agreement
may be executed in several counterparts, each of which shall be deemed to be an original but all of which together will constitute one
and the same instrument.
11. Arbitration. Any dispute or controversy
arising under or in connection with this CIC Agreement shall be settled exclusively by arbitration in New Jersey in accordance with the
rules of the American Arbitration Association then in effect. Judgment may be entered on the arbitrator's award in any court having jurisdiction.
However, you shall be entitled to seek specific performance of your right to be paid until the Date of Termination during the pendency
of any dispute or controversy arising under or in connection this CIC Agreement.
12. Entire Agreement. This CIC Agreement
sets forth the entire understanding of the parties with respect to its subject matter and supersedes all prior written or oral agreements
or understandings with respect to the subject matter.
In witness whereof, the parties have executed this
CIC Agreement as of the day and year first above written.
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MIDDLESEX WATER COMPANY |
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By: |
/s/ |
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Nadine Duchemin-Leslie |
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President & CEO |
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| ATTEST: |
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| /s/ |
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| Mohammed R. Zerhouni, |
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Jay Kooper |
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Exhibit 10.2
CHANGE IN CONTROL AGREEMENT
This Change in Control Termination Agreement (the
“CIC Agreement”) is entered into as of November 1, 2024, between Middlesex Water Company (the “Company”),
a New Jersey corporation, and Lorrie Ginegaw (referred to as “You” in this CIC Agreement).
Recitals
| A. | The Company considers it essential to the best interests of its shareholders to foster the continuous employment of key management
personnel. In this connection, the Board of Directors of the Company (the “Board”) recognizes that, as is the case with many
publicly held Companies, the possibility of a Change in Control may exist. This possibility, and the uncertainty and questions that it
may raise among management, may result in the departure or distraction of management personnel to the detriment of the Company and its
shareholders. |
| B. | The Board has determined that appropriate steps should be taken to reinforce and encourage the continued attention and dedication
of members of the Company’s management, including You, to the assigned duties without distraction in the face of circumstances arising
from the possibility of a Change in Control of the Company. |
| C. | To induce You to remain in the employ of the Company, while simultaneously representing the best interests of the Company’s
shareholders, and in consideration of your agreement set forth below, the Company agrees that You shall receive the severance benefits
set forth in this CIC Agreement in the event your employment with the Company is terminated by the Company, or is terminated by You for
“Good Reason,” as defined herein, in connection with a “Change in Control of the Company” (as defined in Section
2 below). |
Therefore, in consideration of your continued employment
and the parties’ agreement to be bound by the terms contained in this CIC Agreement, the parties agree as follows:
| 1. | Term of CIC Agreement. This CIC Agreement shall commence as of January 1, 2025. However, commencing on December 31,
2025, and each December 31 afterwards, the term of this Agreement shall automatically be extended for one (1) additional year unless,
no later than the preceding November 1st, the Company shall have given notice that it does not wish to extend this Agreement. Notwithstanding
the foregoing, if a Change in Control of the Company shall be proposed to occur, or have occurred, during the original or any extended
term of this CIC Agreement, this CIC Agreement shall continue in effect until your termination of employment with the Company or its successor
or, when all amounts due under this CIC Agreement following a termination have been paid, whichever is later. |
| 2. | Change In Control. No benefits shall be payable under this CIC Agreement unless there shall have been a Change in Control
of the Company, as set forth herein. For purposes of this CIC Agreement, a “Change in Control” of the Company shall be deemed
to occur if any party or group acquires beneficial ownership of 20 percent or more of the voting shares of the Company; or if shareholder
approval is obtained for a transaction involving the acquisition of the Company through the purchase or exchange of the stock or assets
of the Company by merger or otherwise; or if more than one-third of the Board elected in a 12-month period or less are so elected without
the approval of a majority of the Board as constituted at the beginning of such period; or a liquidation or dissolution of Company. |
| 3. | Termination Following Change In Control. If any of the events described in Section 2 above constituting a Change in
Control of the Company shall have occurred, then unless the termination is (A) because of your death, Disability or Retirement, (B) by
the Company for Cause, or (C) by You other than for Good Reason, on the subsequent termination of your employment during the term of this
CIC Agreement, You shall be entitled to the severance benefits provided in Section 4.3 below if such termination occurs on or before the
second (2nd) anniversary of the Change in Control date (the “Change in Control Period”). If such termination occurs
before the Change in Control Date, You shall not be entitled to receive severance benefits under this CIC Agreement. |
3.1 Disability; Retirement. If, as
a result of your incapacity due to physical or mental illness, You shall have been absent from the full-time performance of your duties
with the Company for 6 consecutive months, and within 30 days after written notice of termination is given You shall not have returned
to the full-time performance of your duties, your employment may be terminated for "Disability." Termination of your employment
by the Company or You due to your "Retirement" shall mean termination in accordance with the Company's retirement policy, including
early retirement, generally applicable to its salaried employees or in accordance with any retirement arrangement established with your
consent with respect to You.
3.2 Cause. Termination
by the Company of your employment for "Cause" shall mean termination as a result of:
3.2.1 The willful and continued failure
by You to substantially perform your duties with the Company as such employment was performed by You prior to the Change in Control or
any such actual or anticipated failure after the issuance by You of a Notice of Termination for Good Reason as defined herein after a
written demand for substantial performance is delivered to You by the Board of Directors, which demand specifically identifies the manner
in which the Board believes that You have not substantially performed your duties; or
3.2.2 The willful act by You in conduct
that is demonstrably and materially injurious to the Company, and which the Board deems to cause or will cause substantial economic damage
to the Company or injury to the business reputation of the Company, monetarily or otherwise. For purposes of this Section, no act, or
failure to act, on your part shall be deemed “willful" unless done, or omitted to be done, by You not in good faith and without
a reasonable belief that your action or omission was in the best interest of the Company. Notwithstanding the foregoing, You shall not
be deemed to have been terminated for Cause unless and until there shall have been delivered to You a copy of a resolution duly adopted
by the affirmative vote of not less than three-quarters of the entire membership of the Board at a meeting of the Board called and held
for such purpose (after reasonable notice to You and an opportunity for You, together with your counsel, to be heard before the Board),
finding that in the good faith opinion of the Board You were guilty of conduct set forth above in clauses 3.2.1 or 3.2.2 of this Section
and specifying the particulars in detail.
3.3 CIC Good Reason. You
shall be entitled to receive severance benefits as provided in this CIC Agreement if You terminate your employment with the Company for
“Good Reason.” For purposes of this CIC Agreement, "CIC Good Reason" shall mean, without your consent, the occurrence
in connection with a Change in Control of the Company of any of the following circumstances unless, in the case of Sections 3.3.1, 3.3.5,
3.3.6, 3.3.7, or 3.3.8, the circumstances are fully corrected prior to the Date of Termination specified in the Notice of Termination,
as defined in Sections 3.5 and 3.4, respectively, given in respect of them. If You terminate your employment with the Company for Good
Reason, as provided below, your employment with the Company shall be considered to have been involuntarily terminated by the Company:
3.3.1 The assignment to You of any significant
employment duties which are inconsistent with your status and position (i) prior to the Change in Control where such change is a direct
result of any pending Change in Control; or (ii) as such status exists immediately prior to the Change in Control of the Company, or (iii)
which are a substantial adverse alteration in the nature or status of your responsibilities from those in effect immediately prior to
the Change in Control of the Company whichever is applicable;
3.3.2 A reduction by the Company in your
annual base salary or participation in any incentive compensation programs as in effect on the initial date of this CIC Agreement, or
as same may be increased from time to time irrespective of future Company policies including any across-the-board salary reductions similarly
affecting all key employees of the Company;
3.3.3 Your relocation, without your consent,
to an employment location not within twenty-five (25) miles of your present designated office or job location, except for required travel
on the Company's business to an extent substantially consistent with your present business travel obligations;
3.3.4 The failure by the Company, without
your consent, to pay to You any part of your current compensation, or to pay to You any part of an installment of deferred compensation
under any deferred compensation program of the Company, within fourteen (14) days of the date the compensation is due;
3.3.5 The failure by the Company to continue
in effect any bonus to which You were entitled, or any compensation plan in which You participate (i) prior to the Change in Control where
such change is a direct result of any pending Change in Control, or (ii) immediately prior to the Change in Control of the Company that
is material to your total compensation, including but not limited to the Company's Restricted Stock Plan, 401(k) Plan, and other Benefit
Plans, or any substitute plans adopted prior to the Change in Control of the Company for which you are entitled under a separately executed
employment agreement, unless an equitable arrangement (embodied in an ongoing substitute or alternative plan) has been made with respect
to the plan, or the failure by the Company to continue your participation in it (or in such substitute or alternative plan) on a basis
not materially less favorable, both in terms of the amount of benefits provided and the level of your participation relative to other
participants, as existed at the time of the Change in Control;
3.3.6 The failure by the Company to continue
to provide You with (i) benefits substantially similar to those enjoyed by You under any of the Company's life insurance, medical, health
and accident, or disability plans in which You were participating at the time of the Change in Control of the Company was in effect for
the employees of the Company generally at the time of the Change in Control, (ii) the failure to continue to provide You with a Company
automobile or allowance in lieu of it at the time of the Change in Control of the Company, (iii) the taking of any action by the Company
that would directly or indirectly materially reduce any of such benefits or deprive You of any material fringe benefit enjoyed by You
at the time of the Change in Control of the Company, or (iv) the failure by the Company to provide You with the number of paid vacation
days to which You are entitled with the Company's normal vacation policy or other vacation allowance provided to you by written agreement
in effect at the time of the Change in Control of the Company;
3.3.7 The failure of the Company to obtain
a satisfactory agreement from any successor to assume and agree to perform this CIC Agreement, as contemplated in Section 5 of this CIC
Agreement; or
3.3.8 Any purported termination of your
employment that is not effected pursuant to a Notice of Termination satisfying the requirements of Section 3.4 below (and, if applicable,
the requirements of Section 3.2 above); for purposes of this CIC Agreement, no such purported termination shall be effective.
3.3.9 You cannot terminate your employment
for Good Reason unless You have provided written notice to the Company of the existence of the circumstances providing grounds for termination
for Good Reason within 90 days of the initial existence of such grounds and the Company has had at least 30 days from the date on which
such notice is provided to cure such circumstances, if curable. If You do not provide your Notice of Termination as set forth in Section
3.4 for Good Reason within 90 days after the first occurrence of the applicable grounds, then You will be deemed to have waived your right
to terminate for Good Reason with respect to such grounds.
3.4 Notice of Termination.
Any purported termination of your employment by the Company or by You shall be communicated by written Notice of Termination to the other
party to this CIC Agreement in accordance with Section 6 of this CIC Agreement. For purposes of this CIC Agreement, a "Notice of
Termination" shall mean a notice that shall indicate the specific termination provision in this CIC Agreement relied on and shall
set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of your employment under the provision
so indicated. Your rights to terminate your employment pursuant to this Section shall not be affected by your incapacity due to Disability.
In the event You deliver Notice of Termination based on circumstances set forth in Sections 3.3.1, 3.3.5, 3.3.6, 3.3.7, or 3.3.8 above,
which are fully corrected prior to the Date of Termination set forth in your Notice of Termination, the Notice of Termination shall be
deemed withdrawn and of no further force or effect.
3.5 Date of Termination, etc.
"Date of Termination" shall mean (A) if your employment is terminated for Disability, 30 days after Notice of Termination is
given (provided that You shall not have returned to the full-time performance of your duties during such 30-day period), and (B) if your
employment is terminated pursuant to Section 3.2 or 3.3 above or for any other reason (other than Disability), the date specified in the
Notice of Termination (which, in the case of a termination pursuant to Section 3.2 above shall not be less than 30 days, and in the case
of a termination pursuant to Section 3.3 above shall not be less than 30 nor more than 60 days, respectively, from the date the Notice
of Termination is given). However, if within 15 days after any Notice of Termination is given, or, if later, prior to the Date of Termination
(as determined without regard to this provision), the party receiving the Notice of Termination notifies the other party that a dispute
exists concerning the termination, then the Date of Termination shall be the date on which the dispute is finally determined, either by
mutual written agreement of the parties, by a binding arbitration award, or by a final judgment, order, or decree of a court of competent
jurisdiction (which is not appealable or with respect to which the time for appeal has expired and no appeal has been perfected). The
Date of Termination shall be extended by a notice of dispute only if the notice is given in good faith and the party giving the notice
pursues the resolution of the dispute with reasonable diligence. Notwithstanding the pendency of any such dispute, the Company will continue
to pay You your full compensation in effect when the notice giving rise to the dispute was given (including, but not limited to, base
salary) and continue You as a participant in all compensation, benefit, and insurance plans in which You were participating when the notice
giving rise to the dispute was given, until the dispute is finally resolved in accordance with this Section. Amounts paid under this Section
are in addition to all other amounts due under this CIC Agreement and shall not be offset against or reduce any other amounts due under
this CIC Agreement.
4. Compensation on Termination or During Disability.
Following a Change in Control of the Company, as defined by Section 2, on termination of your employment or during a period of Disability
You shall be entitled to the following benefits:
4.1 During any period that You fail to
perform your full-time duties with the Company as a result of incapacity due to Disability, You shall continue to receive your base salary
at the rate in effect at the commencement of any such period, together with all amounts payable to You under any compensation plan of
the Company during the period, until this CIC Agreement is terminated pursuant to section 3.1 above. Thereafter, or in the event your
employment shall be terminated by the Company or by You for Retirement, or by reason of your death, your benefits shall be determined
under the Company's retirement, insurance, and other compensation programs then in effect in accordance with the terms of those programs.
4.2 If your employment shall be terminated
by the Company for Cause or by You other than for Good Reason, Disability, death, or Retirement during a Change In Control Period, the
Company shall pay You your full base salary through the Date of Termination at the rate in effect at the time Notice of Termination is
given, plus all other amounts and benefits to which You are entitled under any compensation plan of the Company at the time the payments
are due. The Company shall have no obligations to You under this CIC Agreement.
4.3 On or before the second anniversary
of the Change In Control, if your employment by the Company shall be terminated (a) by the Company other than for Cause or Disability,
or (b) by You for Good Reason (as defined in Section 3.3 herein), then You shall be entitled to the benefits provided below:
4.3.1 The Company shall pay You your full
salary through the Date of Termination at the rate in effect at the time Notice of Termination is given, plus all other amounts and benefits
to which You are entitled under any compensation plan of the Company, at the time the payments are due, except as otherwise provided below.
4.3.2 In lieu of any further salary payments
to You for periods subsequent to the Date of Termination, the Company shall pay to You, as severance pay the following: (i) a lump sum
severance payment equal to two (2) times the average of your Compensation for the five (5) years prior to the occurrence of the circumstance
giving rise to the Notice of Termination (or if employed less than 5 years, the average annualized Compensation of the period worked to
date), plus (ii) the amounts in the forms set forth in paragraphs 4.3.3, 4.3.4 and 4.3.5 (the “Severance Payments”). Such
Severance Payments are further subject to any limitations which may apply in the context of a Change in Control as referenced in a separately
executed Employment Agreement.
4.3.3 If permitted under the terms of such
plans, the Company shall continue coverage for You and your dependents under any health or welfare benefit plan under which You and your
dependents were participating prior to the Change in Control for a period ending on the earlier to occur of (i) the date You become
covered by a new employer’s health and welfare benefit plan, (ii) the date You become covered by Medicare, or (iii) the date which
is twenty-four (24) months from the Date of Termination. The coverage for your dependents shall end earlier than (i), (ii) or (iii) if
required by the health or welfare benefit plan due to age eligibility.
4.3.4 The Company shall pay to You any
deferred compensation, including, but not limited to deferred bonuses, allocated or credited to You or your account as of the Date of
Termination.
4.3.5 Outstanding stock options or Restricted
Stock grants, if any, granted to You under the Company's Stock Plans which are not vested on Termination shall immediately vest.
4.3.6 Where You shall prevail in any action
against the Company to recover benefits hereunder, the Company shall also pay to You all reasonable legal and accounting fees and expenses
incurred by You as a result of the termination, including all such fees and expenses incurred by You as a result of the termination, (including
all such fees and expenses, if any, incurred in contesting or disputing any termination or in seeking to obtain or enforce any right or
benefit provided by this CIC Agreement or in connection with any tax audit or proceeding to the extent attributable to the application
of Code Section 4999 to any payment or benefit provided under this CIC Agreement) or any other agreement with the Company.
4.3.7 The amount of Severance Payments
due to You under this or any other relevant agreement with the Company shall be determined by the Board in its reasonable discretion.
The payments provided for in Paragraphs 4.3.2, 4.3.4 and 4.3.5 above, shall be made no later than the thirtieth (30th) day
following the Date of Termination. However, if the amounts of the payments cannot be finally determined on or before that day, the Company
shall pay to You on that day an estimate, as determined in good faith by the Company, of the minimum amount of such payments and shall
pay the remainder of those payments (together with interest at the rate provided in Section 1274(b)(2)(B) of the Code) as soon as the
amount can be determined but in no event later than two and a half months after the Date of Termination. In the event that the amount
of the estimated payments exceeds the amount subsequently determined to have been due, the excess shall constitute a loan by the Company
to You payable on the 30th day after demand by the Company (together with interest at the rate provided in Section 1274(b)(2)(B) of the
Code).
4.4 For purposes
of this CIC Agreement:
4.4.1 If your employment is terminated
in connection with the Change in Control “Compensation” shall mean two (2) times Your base salary plus two (2) times Your
targeted annual equity grant.
4.5 You shall not be required to mitigate the amount
of any payment provided for in this Section 4 by seeking other employment or otherwise, nor shall the amount of any payment or benefit
provided for in this Section 4 be reduced by any compensation earned by You as the result of employment by another employer, by retirement
benefits, by offset against any amount claimed to be owed by You to the Company, or otherwise except as specifically provided in this
Section 4.
4.6 In addition to all other amounts payable to You
under this Section 4, You shall be entitled to receive all qualified benefits payable to You under the Company's 401(k) Plan, Defined
Benefit Plan and any other plan or agreement relating to retirement benefits, in accordance with the terms of those Plans, to the extent
you were a participant in such Plan or Plans as of the date of a Change in Control.
5. Successors; Binding Agreement.
5.1 The Company will require any successor (whether
direct or indirect, by purchase, merger, consolidation, or otherwise) to all or substantially all of the business and/or assets of the
Company to expressly assume and agree to perform this CIC Agreement in the same manner and to the same extent that the Company would be
required to perform it if no such succession had taken place. Failure of the Company to obtain the assumption and agreement prior to the
effectiveness of any succession shall be a breach of this CIC Agreement and shall entitle You to compensation from the Company in the
same amount and on the same terms as You would have been entitled to under this CIC Agreement if You had terminated your employment for
Good Reason following a Change in Control of the Company, except that for purposes of implementing the foregoing, the date on which any
such succession becomes effective shall be deemed the Date of Termination.
5.2 This CIC Agreement shall inure to the benefit
of, and be enforceable by, your personal or legal representatives, executors, administrators, heirs, distributees, and legatees. If You
should die while any amount would still be payable to You if You had continued to live, all such amounts, unless otherwise provided in
this CIC Agreement, shall be paid in accordance with the terms of this CIC Agreement to your legatee or other designee or, if there is
no such designee, to your estate.
6. Notice For the purpose of this
CIC Agreement, all notices and other communications provided for in the CIC Agreement shall be in writing and shall be deemed to have
been duly given when delivered or mailed by United States registered or certified mail, return receipt requested, postage prepaid, addressed
to the respective addresses set forth on the first page of this CIC Agreement, provided that all notices to the Company shall be directed
to the attention of the Board with a copy to the President of the Company, or to such other address as either party may have furnished
to the other in writing in accordance this CIC Agreement, except that notice of a change of address shall be effective only on receipt.
7. Section 409A
7.1 This CIC Agreement is intended to comply with
Code Section 409A or an exemption thereunder and shall be construed and administered in accordance with Code Section 409A. Notwithstanding
any other provision of this CIC Agreement, payments provided under this CIC Agreement may only be made upon an event and in a manner that
complies with Code Section 409A or an applicable exemption. Any payments under this CIC Agreement that may be excluded from Code Section
409A either as separation pay due to an involuntary separation from service or as a short-term deferral shall be excluded from Code Section
409A to the maximum extent possible. For purposes of Code Section 409A, each installment payment provided under this CIC Agreement shall
be treated as a separate payment. Notwithstanding the foregoing, the Company makes no representations that the payments and benefits provided
under this CIC Agreement comply with Code Section 409A and in no event shall the Company be liable for all or any portion of any taxes,
penalties, interest, or other expenses that may be incurred by a Participant on account of non-compliance with Code Section 409A.
7.2 Notwithstanding any other provision of this CIC
Agreement, any Severance Payment under this CIC Agreement that (i) is determined to constitute “nonqualified deferred compensation”
within the meaning of Code Section 409A and (ii) is to be made under this CIC Agreement upon the Date of Termination shall only be made
upon a “separation from service” under Code Section 409A.
7.3 Notwithstanding any other provision of this CIC
Agreement, if any Severance Payment (i) is determined to constitute “nonqualified deferred compensation” within the meaning
of Code Section 409A and (ii) You are determined to be a “specified employee” as defined in Code Section 409A(a)(2)(b)(i),
then such Severance Payment shall not be paid until the first payroll date to occur following the six-month anniversary of Your “separation
from service” or, if earlier, on Your death (the “Specified Employee Payment Date”). The aggregate of any payments that
would otherwise have been paid before the Specified Employee Payment Date shall be paid to You in a lump sum on the Specified Employee
Payment Date and thereafter, any remaining payments shall be paid without delay in accordance with their original schedule.
8. Miscellaneous
8.1 No provision of this CIC Agreement may be modified,
waived, or discharged unless the waiver, modification, or discharge is agreed to in writing and signed by You and such officer as may
be specifically designated by the Board.
8.2 No waiver by either party to this CIC Agreement
at any time of any breach by the other party of, or compliance with, any condition or provision of this CIC Agreement to be performed
by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent
time.
8.3 No agreements or representations, oral or otherwise,
express, or implied, with respect to the subject matter of this CIC Agreement have been made by either party that are not expressly set
forth in this CIC Agreement.
8.4 Nothing in this CIC Agreement is intended to
reduce any benefits payable to You under any other agreement You may have with the Company or in any Company plan in which You may participate.
8.5 The validity, interpretation, construction, and
performance of this CIC Agreement shall be governed by the law of New Jersey without reference to its conflict of laws principles.
8.6 All references to sections of the Exchange Act
or the Code shall be deemed also to refer to any successor provisions to such sections. Any payments provided for shall be paid net of
any applicable withholding or deduction required under federal, state or local law.
8.7 The obligations of the Company under Section
4 shall survive the expiration of the term of this CIC Agreement.
9. Validity. The validity or enforceability
of any provision of this CIC Agreement shall not affect the validity or unenforceability of any other provision of this CIC Agreement,
which shall remain in full force and effect.
10. Counterparts. This CIC Agreement
may be executed in several counterparts, each of which shall be deemed to be an original but all of which together will constitute one
and the same instrument.
11. Arbitration. Any dispute or controversy
arising under or in connection with this CIC Agreement shall be settled exclusively by arbitration in New Jersey in accordance with the
rules of the American Arbitration Association then in effect. Judgment may be entered on the arbitrator's award in any court having jurisdiction.
However, you shall be entitled to seek specific performance of your right to be paid until the Date of Termination during the pendency
of any dispute or controversy arising under or in connection this CIC Agreement.
12. Entire Agreement. This CIC Agreement
sets forth the entire understanding of the parties with respect to its subject matter and supersedes all prior written or oral agreements
or understandings with respect to the subject matter.
In witness whereof, the parties have executed this
CIC Agreement as of the day and year first above written.
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MIDDLESEX WATER COMPANY |
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By: |
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Nadine Duchemin-Leslie |
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President & CEO |
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| ATTEST: |
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| Jay L. Kooper, Vice President, |
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| General Counsel & Secretary |
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Lorrie Ginegaw |
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Exhibit 10.3
CHANGE IN CONTROL AGREEMENT
This Change in Control Termination Agreement (the
“CIC Agreement”) is entered into as of November 1, 2024, between Middlesex Water Company (the “Company”),
a New Jersey corporation, and Robert Fullagar (referred to as “You” in this CIC Agreement).
Recitals
| A. | The Company considers it essential to the best interests of its shareholders to foster the continuous employment of key management
personnel. In this connection, the Board of Directors of the Company (the “Board”) recognizes that, as is the case with many
publicly held Companies, the possibility of a Change in Control may exist. This possibility, and the uncertainty and questions that it
may raise among management, may result in the departure or distraction of management personnel to the detriment of the Company and its
shareholders. |
| B. | The Board has determined that appropriate steps should be taken to reinforce and encourage the continued attention and dedication
of members of the Company’s management, including You, to the assigned duties without distraction in the face of circumstances arising
from the possibility of a Change in Control of the Company. |
| C. | To induce You to remain in the employ of the Company, while simultaneously representing the best interests of the Company’s
shareholders, and in consideration of your agreement set forth below, the Company agrees that You shall receive the severance benefits
set forth in this CIC Agreement in the event your employment with the Company is terminated by the Company, or is terminated by You for
“Good Reason,” as defined herein, in connection with a “Change in Control of the Company” (as defined in Section
2 below). |
Therefore, in consideration of your continued employment
and the parties’ agreement to be bound by the terms contained in this CIC Agreement, the parties agree as follows:
| 1. | Term of CIC Agreement. This CIC Agreement shall commence as of January 1, 2025. However, commencing on December 31,
2025, and each December 31 afterwards, the term of this Agreement shall automatically be extended for one (1) additional year unless,
no later than the preceding November 1st, the Company shall have given notice that it does not wish to extend this Agreement. Notwithstanding
the foregoing, if a Change in Control of the Company shall be proposed to occur, or have occurred, during the original or any extended
term of this CIC Agreement, this CIC Agreement shall continue in effect until your termination of employment with the Company or its successor
or, when all amounts due under this CIC Agreement following a termination have been paid, whichever is later. |
| 2. | Change In Control. No benefits shall be payable under this CIC Agreement unless there shall have been a Change in Control
of the Company, as set forth herein. For purposes of this CIC Agreement, a “Change in Control” of the Company shall be deemed
to occur if any party or group acquires beneficial ownership of 20 percent or more of the voting shares of the Company; or if shareholder
approval is obtained for a transaction involving the acquisition of the Company through the purchase or exchange of the stock or assets
of the Company by merger or otherwise; or if more than one-third of the Board elected in a 12-month period or less are so elected without
the approval of a majority of the Board as constituted at the beginning of such period; or a liquidation or dissolution of Company. |
| 3. | Termination Following Change In Control. If any of the events described in Section 2 above constituting a Change in
Control of the Company shall have occurred, then unless the termination is (A) because of your death, Disability or Retirement, (B) by
the Company for Cause, or (C) by You other than for Good Reason, on the subsequent termination of your employment during the term of this
CIC Agreement, You shall be entitled to the severance benefits provided in Section 4.3 below if such termination occurs on or before the
second (2nd) anniversary of the Change in Control date (the “Change in Control Period”). If such termination occurs
before the Change in Control Date, You shall not be entitled to receive severance benefits under this CIC Agreement. |
3.1 Disability; Retirement. If, as
a result of your incapacity due to physical or mental illness, You shall have been absent from the full-time performance of your duties
with the Company for 6 consecutive months, and within 30 days after written notice of termination is given You shall not have returned
to the full-time performance of your duties, your employment may be terminated for "Disability." Termination of your employment
by the Company or You due to your "Retirement" shall mean termination in accordance with the Company's retirement policy, including
early retirement, generally applicable to its salaried employees or in accordance with any retirement arrangement established with your
consent with respect to You.
3.2 Cause. Termination
by the Company of your employment for "Cause" shall mean termination as a result of:
3.2.1 The willful and continued failure
by You to substantially perform your duties with the Company as such employment was performed by You prior to the Change in Control or
any such actual or anticipated failure after the issuance by You of a Notice of Termination for Good Reason as defined herein after a
written demand for substantial performance is delivered to You by the Board of Directors, which demand specifically identifies the manner
in which the Board believes that You have not substantially performed your duties; or
3.2.2 The willful act by You in conduct
that is demonstrably and materially injurious to the Company, and which the Board deems to cause or will cause substantial economic damage
to the Company or injury to the business reputation of the Company, monetarily or otherwise. For purposes of this Section, no act, or
failure to act, on your part shall be deemed “willful" unless done, or omitted to be done, by You not in good faith and without
a reasonable belief that your action or omission was in the best interest of the Company. Notwithstanding the foregoing, You shall not
be deemed to have been terminated for Cause unless and until there shall have been delivered to You a copy of a resolution duly adopted
by the affirmative vote of not less than three-quarters of the entire membership of the Board at a meeting of the Board called and held
for such purpose (after reasonable notice to You and an opportunity for You, together with your counsel, to be heard before the Board),
finding that in the good faith opinion of the Board You were guilty of conduct set forth above in clauses 3.2.1 or 3.2.2 of this Section
and specifying the particulars in detail.
3.3 CIC Good Reason. You
shall be entitled to receive severance benefits as provided in this CIC Agreement if You terminate your employment with the Company for
“Good Reason.” For purposes of this CIC Agreement, "CIC Good Reason" shall mean, without your consent, the occurrence
in connection with a Change in Control of the Company of any of the following circumstances unless, in the case of Sections 3.3.1, 3.3.5,
3.3.6, 3.3.7, or 3.3.8, the circumstances are fully corrected prior to the Date of Termination specified in the Notice of Termination,
as defined in Sections 3.5 and 3.4, respectively, given in respect of them. If You terminate your employment with the Company for Good
Reason, as provided below, your employment with the Company shall be considered to have been involuntarily terminated by the Company:
3.3.1 The assignment to You of any significant
employment duties which are inconsistent with your status and position (i) prior to the Change in Control where such change is a direct
result of any pending Change in Control; or (ii) as such status exists immediately prior to the Change in Control of the Company, or (iii)
which are a substantial adverse alteration in the nature or status of your responsibilities from those in effect immediately prior to
the Change in Control of the Company whichever is applicable;
3.3.2 A reduction by the Company in your
annual base salary or participation in any incentive compensation programs as in effect on the initial date of this CIC Agreement, or
as same may be increased from time to time irrespective of future Company policies including any across-the-board salary reductions similarly
affecting all key employees of the Company;
3.3.3 Your relocation, without your consent,
to an employment location not within twenty-five (25) miles of your present designated office or job location, except for required travel
on the Company's business to an extent substantially consistent with your present business travel obligations;
3.3.4 The failure by the Company, without
your consent, to pay to You any part of your current compensation, or to pay to You any part of an installment of deferred compensation
under any deferred compensation program of the Company, within fourteen (14) days of the date the compensation is due;
3.3.5 The failure by the Company to continue
in effect any bonus to which You were entitled, or any compensation plan in which You participate (i) prior to the Change in Control where
such change is a direct result of any pending Change in Control, or (ii) immediately prior to the Change in Control of the Company that
is material to your total compensation, including but not limited to the Company's Restricted Stock Plan, 401(k) Plan, and other Benefit
Plans, or any substitute plans adopted prior to the Change in Control of the Company for which you are entitled under a separately executed
employment agreement, unless an equitable arrangement (embodied in an ongoing substitute or alternative plan) has been made with respect
to the plan, or the failure by the Company to continue your participation in it (or in such substitute or alternative plan) on a basis
not materially less favorable, both in terms of the amount of benefits provided and the level of your participation relative to other
participants, as existed at the time of the Change in Control;
3.3.6 The failure by the Company to continue
to provide You with (i) benefits substantially similar to those enjoyed by You under any of the Company's life insurance, medical, health
and accident, or disability plans in which You were participating at the time of the Change in Control of the Company was in effect for
the employees of the Company generally at the time of the Change in Control, (ii) the failure to continue to provide You with a Company
automobile or allowance in lieu of it at the time of the Change in Control of the Company, (iii) the taking of any action by the Company
that would directly or indirectly materially reduce any of such benefits or deprive You of any material fringe benefit enjoyed by You
at the time of the Change in Control of the Company, or (iv) the failure by the Company to provide You with the number of paid vacation
days to which You are entitled with the Company's normal vacation policy or other vacation allowance provided to you by written agreement
in effect at the time of the Change in Control of the Company;
3.3.7 The failure of the Company to obtain
a satisfactory agreement from any successor to assume and agree to perform this CIC Agreement, as contemplated in Section 5 of this CIC
Agreement; or
3.3.8 Any purported termination of your
employment that is not effected pursuant to a Notice of Termination satisfying the requirements of Section 3.4 below (and, if applicable,
the requirements of Section 3.2 above); for purposes of this CIC Agreement, no such purported termination shall be effective.
3.3.9 You cannot terminate your employment
for Good Reason unless You have provided written notice to the Company of the existence of the circumstances providing grounds for termination
for Good Reason within 90 days of the initial existence of such grounds and the Company has had at least 30 days from the date on which
such notice is provided to cure such circumstances, if curable. If You do not provide your Notice of Termination as set forth in Section
3.4 for Good Reason within 90 days after the first occurrence of the applicable grounds, then You will be deemed to have waived your right
to terminate for Good Reason with respect to such grounds.
3.4 Notice of Termination.
Any purported termination of your employment by the Company or by You shall be communicated by written Notice of Termination to the other
party to this CIC Agreement in accordance with Section 6 of this CIC Agreement. For purposes of this CIC Agreement, a "Notice of
Termination" shall mean a notice that shall indicate the specific termination provision in this CIC Agreement relied on and shall
set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of your employment under the provision
so indicated. Your rights to terminate your employment pursuant to this Section shall not be affected by your incapacity due to Disability.
In the event You deliver Notice of Termination based on circumstances set forth in Sections 3.3.1, 3.3.5, 3.3.6, 3.3.7, or 3.3.8 above,
which are fully corrected prior to the Date of Termination set forth in your Notice of Termination, the Notice of Termination shall be
deemed withdrawn and of no further force or effect.
3.5 Date of Termination, etc.
"Date of Termination" shall mean (A) if your employment is terminated for Disability, 30 days after Notice of Termination is
given (provided that You shall not have returned to the full-time performance of your duties during such 30-day period), and (B) if your
employment is terminated pursuant to Section 3.2 or 3.3 above or for any other reason (other than Disability), the date specified in the
Notice of Termination (which, in the case of a termination pursuant to Section 3.2 above shall not be less than 30 days, and in the case
of a termination pursuant to Section 3.3 above shall not be less than 30 nor more than 60 days, respectively, from the date the Notice
of Termination is given). However, if within 15 days after any Notice of Termination is given, or, if later, prior to the Date of Termination
(as determined without regard to this provision), the party receiving the Notice of Termination notifies the other party that a dispute
exists concerning the termination, then the Date of Termination shall be the date on which the dispute is finally determined, either by
mutual written agreement of the parties, by a binding arbitration award, or by a final judgment, order, or decree of a court of competent
jurisdiction (which is not appealable or with respect to which the time for appeal has expired and no appeal has been perfected). The
Date of Termination shall be extended by a notice of dispute only if the notice is given in good faith and the party giving the notice
pursues the resolution of the dispute with reasonable diligence. Notwithstanding the pendency of any such dispute, the Company will continue
to pay You your full compensation in effect when the notice giving rise to the dispute was given (including, but not limited to, base
salary) and continue You as a participant in all compensation, benefit, and insurance plans in which You were participating when the notice
giving rise to the dispute was given, until the dispute is finally resolved in accordance with this Section. Amounts paid under this Section
are in addition to all other amounts due under this CIC Agreement and shall not be offset against or reduce any other amounts due under
this CIC Agreement.
4. Compensation on Termination or During Disability.
Following a Change in Control of the Company, as defined by Section 2, on termination of your employment or during a period of Disability
You shall be entitled to the following benefits:
4.1 During any period that You fail to
perform your full-time duties with the Company as a result of incapacity due to Disability, You shall continue to receive your base salary
at the rate in effect at the commencement of any such period, together with all amounts payable to You under any compensation plan of
the Company during the period, until this CIC Agreement is terminated pursuant to section 3.1 above. Thereafter, or in the event your
employment shall be terminated by the Company or by You for Retirement, or by reason of your death, your benefits shall be determined
under the Company's retirement, insurance, and other compensation programs then in effect in accordance with the terms of those programs.
4.2 If your employment shall be terminated
by the Company for Cause or by You other than for Good Reason, Disability, death, or Retirement during a Change In Control Period, the
Company shall pay You your full base salary through the Date of Termination at the rate in effect at the time Notice of Termination is
given, plus all other amounts and benefits to which You are entitled under any compensation plan of the Company at the time the payments
are due. The Company shall have no obligations to You under this CIC Agreement.
4.3 On or before the second anniversary
of the Change In Control, if your employment by the Company shall be terminated (a) by the Company other than for Cause or Disability,
or (b) by You for Good Reason (as defined in Section 3.3 herein), then You shall be entitled to the benefits provided below:
4.3.1 The Company shall pay You your full
salary through the Date of Termination at the rate in effect at the time Notice of Termination is given, plus all other amounts and benefits
to which You are entitled under any compensation plan of the Company, at the time the payments are due, except as otherwise provided below.
4.3.2 In lieu of any further salary payments
to You for periods subsequent to the Date of Termination, the Company shall pay to You, as severance pay the following: (i) a lump sum
severance payment equal to two (2) times the average of your Compensation for the five (5) years prior to the occurrence of the circumstance
giving rise to the Notice of Termination (or if employed less than 5 years, the average annualized Compensation of the period worked to
date), plus (ii) the amounts in the forms set forth in paragraphs 4.3.3, 4.3.4 and 4.3.5 (the “Severance Payments”). Such
Severance Payments are further subject to any limitations which may apply in the context of a Change in Control as referenced in a separately
executed Employment Agreement.
4.3.3 If permitted under the terms of such
plans, the Company shall continue coverage for You and your dependents under any health or welfare benefit plan under which You and your
dependents were participating prior to the Change in Control for a period ending on the earlier to occur of (i) the date You become
covered by a new employer’s health and welfare benefit plan, (ii) the date You become covered by Medicare, or (iii) the date which
is twenty-four (24) months from the Date of Termination. The coverage for your dependents shall end earlier than (i), (ii) or (iii) if
required by the health or welfare benefit plan due to age eligibility.
4.3.4 The Company shall pay to You any
deferred compensation, including, but not limited to deferred bonuses, allocated or credited to You or your account as of the Date of
Termination.
4.3.5 Outstanding stock options or Restricted
Stock grants, if any, granted to You under the Company's Stock Plans which are not vested on Termination shall immediately vest.
4.3.6 Where You shall prevail in any action
against the Company to recover benefits hereunder, the Company shall also pay to You all reasonable legal and accounting fees and expenses
incurred by You as a result of the termination, including all such fees and expenses incurred by You as a result of the termination, (including
all such fees and expenses, if any, incurred in contesting or disputing any termination or in seeking to obtain or enforce any right or
benefit provided by this CIC Agreement or in connection with any tax audit or proceeding to the extent attributable to the application
of Code Section 4999 to any payment or benefit provided under this CIC Agreement) or any other agreement with the Company.
4.3.7 The amount of Severance Payments
due to You under this or any other relevant agreement with the Company shall be determined by the Board in its reasonable discretion.
The payments provided for in Paragraphs 4.3.2, 4.3.4 and 4.3.5 above, shall be made no later than the thirtieth (30th) day
following the Date of Termination. However, if the amounts of the payments cannot be finally determined on or before that day, the Company
shall pay to You on that day an estimate, as determined in good faith by the Company, of the minimum amount of such payments and shall
pay the remainder of those payments (together with interest at the rate provided in Section 1274(b)(2)(B) of the Code) as soon as the
amount can be determined but in no event later than two and a half months after the Date of Termination. In the event that the amount
of the estimated payments exceeds the amount subsequently determined to have been due, the excess shall constitute a loan by the Company
to You payable on the 30th day after demand by the Company (together with interest at the rate provided in Section 1274(b)(2)(B) of the
Code).
4.4 For purposes
of this CIC Agreement:
4.4.1 If your employment is terminated
in connection with the Change in Control “Compensation” shall mean two (2) times Your base salary plus two (2) times Your
targeted annual equity grant.
4.5 You shall not be required to mitigate the amount
of any payment provided for in this Section 4 by seeking other employment or otherwise, nor shall the amount of any payment or benefit
provided for in this Section 4 be reduced by any compensation earned by You as the result of employment by another employer, by retirement
benefits, by offset against any amount claimed to be owed by You to the Company, or otherwise except as specifically provided in this
Section 4.
4.6 In addition to all other amounts payable to You
under this Section 4, You shall be entitled to receive all qualified benefits payable to You under the Company's 401(k) Plan, Defined
Benefit Plan and any other plan or agreement relating to retirement benefits, in accordance with the terms of those Plans, to the extent
you were a participant in such Plan or Plans as of the date of a Change in Control.
5. Successors; Binding Agreement.
5.1 The Company will require any successor (whether
direct or indirect, by purchase, merger, consolidation, or otherwise) to all or substantially all of the business and/or assets of the
Company to expressly assume and agree to perform this CIC Agreement in the same manner and to the same extent that the Company would be
required to perform it if no such succession had taken place. Failure of the Company to obtain the assumption and agreement prior to the
effectiveness of any succession shall be a breach of this CIC Agreement and shall entitle You to compensation from the Company in the
same amount and on the same terms as You would have been entitled to under this CIC Agreement if You had terminated your employment for
Good Reason following a Change in Control of the Company, except that for purposes of implementing the foregoing, the date on which any
such succession becomes effective shall be deemed the Date of Termination.
5.2 This CIC Agreement shall inure to the benefit
of, and be enforceable by, your personal or legal representatives, executors, administrators, heirs, distributees, and legatees. If You
should die while any amount would still be payable to You if You had continued to live, all such amounts, unless otherwise provided in
this CIC Agreement, shall be paid in accordance with the terms of this CIC Agreement to your legatee or other designee or, if there is
no such designee, to your estate.
6. Notice For the purpose of this
CIC Agreement, all notices and other communications provided for in the CIC Agreement shall be in writing and shall be deemed to have
been duly given when delivered or mailed by United States registered or certified mail, return receipt requested, postage prepaid, addressed
to the respective addresses set forth on the first page of this CIC Agreement, provided that all notices to the Company shall be directed
to the attention of the Board with a copy to the President of the Company, or to such other address as either party may have furnished
to the other in writing in accordance this CIC Agreement, except that notice of a change of address shall be effective only on receipt.
7. Section 409A
7.1 This CIC Agreement is intended to comply with
Code Section 409A or an exemption thereunder and shall be construed and administered in accordance with Code Section 409A. Notwithstanding
any other provision of this CIC Agreement, payments provided under this CIC Agreement may only be made upon an event and in a manner that
complies with Code Section 409A or an applicable exemption. Any payments under this CIC Agreement that may be excluded from Code Section
409A either as separation pay due to an involuntary separation from service or as a short-term deferral shall be excluded from Code Section
409A to the maximum extent possible. For purposes of Code Section 409A, each installment payment provided under this CIC Agreement shall
be treated as a separate payment. Notwithstanding the foregoing, the Company makes no representations that the payments and benefits provided
under this CIC Agreement comply with Code Section 409A and in no event shall the Company be liable for all or any portion of any taxes,
penalties, interest, or other expenses that may be incurred by a Participant on account of non-compliance with Code Section 409A.
7.2 Notwithstanding any other provision of this CIC
Agreement, any Severance Payment under this CIC Agreement that (i) is determined to constitute “nonqualified deferred compensation”
within the meaning of Code Section 409A and (ii) is to be made under this CIC Agreement upon the Date of Termination shall only be made
upon a “separation from service” under Code Section 409A.
7.3 Notwithstanding any other provision of this CIC
Agreement, if any Severance Payment (i) is determined to constitute “nonqualified deferred compensation” within the meaning
of Code Section 409A and (ii) You are determined to be a “specified employee” as defined in Code Section 409A(a)(2)(b)(i),
then such Severance Payment shall not be paid until the first payroll date to occur following the six-month anniversary of Your “separation
from service” or, if earlier, on Your death (the “Specified Employee Payment Date”). The aggregate of any payments that
would otherwise have been paid before the Specified Employee Payment Date shall be paid to You in a lump sum on the Specified Employee
Payment Date and thereafter, any remaining payments shall be paid without delay in accordance with their original schedule.
8. Miscellaneous
8.1 No provision of this CIC Agreement may be modified,
waived, or discharged unless the waiver, modification, or discharge is agreed to in writing and signed by You and such officer as may
be specifically designated by the Board.
8.2 No waiver by either party to this CIC Agreement
at any time of any breach by the other party of, or compliance with, any condition or provision of this CIC Agreement to be performed
by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent
time.
8.3 No agreements or representations, oral or otherwise,
express, or implied, with respect to the subject matter of this CIC Agreement have been made by either party that are not expressly set
forth in this CIC Agreement.
8.4 Nothing in this CIC Agreement is intended to
reduce any benefits payable to You under any other agreement You may have with the Company or in any Company plan in which You may participate.
8.5 The validity, interpretation, construction, and
performance of this CIC Agreement shall be governed by the law of New Jersey without reference to its conflict of laws principles.
8.6 All references to sections of the Exchange Act
or the Code shall be deemed also to refer to any successor provisions to such sections. Any payments provided for shall be paid net of
any applicable withholding or deduction required under federal, state or local law.
8.7 The obligations of the Company under Section
4 shall survive the expiration of the term of this CIC Agreement.
9. Validity. The validity or enforceability
of any provision of this CIC Agreement shall not affect the validity or unenforceability of any other provision of this CIC Agreement,
which shall remain in full force and effect.
10. Counterparts. This CIC Agreement
may be executed in several counterparts, each of which shall be deemed to be an original but all of which together will constitute one
and the same instrument.
11. Arbitration. Any dispute or controversy
arising under or in connection with this CIC Agreement shall be settled exclusively by arbitration in New Jersey in accordance with the
rules of the American Arbitration Association then in effect. Judgment may be entered on the arbitrator's award in any court having jurisdiction.
However, you shall be entitled to seek specific performance of your right to be paid until the Date of Termination during the pendency
of any dispute or controversy arising under or in connection this CIC Agreement.
12. Entire Agreement. This CIC Agreement
sets forth the entire understanding of the parties with respect to its subject matter and supersedes all prior written or oral agreements
or understandings with respect to the subject matter.
In witness whereof, the parties have executed this
CIC Agreement as of the day and year first above written.
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MIDDLESEX WATER COMPANY |
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By: |
/s/ |
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Nadine Duchemin-Leslie |
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President & CEO |
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| ATTEST: |
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| Jay L. Kooper, Vice President, |
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| General Counsel & Secretary |
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/s/ |
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Robert Fullagar |
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Exhibit 10.4
CHANGE IN CONTROL AGREEMENT
This Change in Control Termination Agreement (the
“CIC Agreement”) is entered into as of November 1, 2024, between Middlesex Water Company (the “Company”),
a New Jersey corporation, and Georgia Simpson (referred to as “You” in this CIC Agreement).
Recitals
| A. | The Company considers it essential to the best interests of its shareholders to foster the continuous employment of key management
personnel. In this connection, the Board of Directors of the Company (the “Board”) recognizes that, as is the case with many
publicly held Companies, the possibility of a Change in Control may exist. This possibility, and the uncertainty and questions that it
may raise among management, may result in the departure or distraction of management personnel to the detriment of the Company and its
shareholders. |
| B. | The Board has determined that appropriate steps should be taken to reinforce and encourage the continued attention and dedication
of members of the Company’s management, including You, to the assigned duties without distraction in the face of circumstances arising
from the possibility of a Change in Control of the Company. |
| C. | To induce You to remain in the employ of the Company, while simultaneously representing the best interests of the Company’s
shareholders, and in consideration of your agreement set forth below, the Company agrees that You shall receive the severance benefits
set forth in this CIC Agreement in the event your employment with the Company is terminated by the Company, or is terminated by You for
“Good Reason,” as defined herein, in connection with a “Change in Control of the Company” (as defined in Section
2 below). |
Therefore, in consideration of your continued employment
and the parties’ agreement to be bound by the terms contained in this CIC Agreement, the parties agree as follows:
| 1. | Term of CIC Agreement. This CIC Agreement shall commence as of January 1, 2025. However, commencing on December 31,
2025, and each December 31 afterwards, the term of this Agreement shall automatically be extended for one (1) additional year unless,
no later than the preceding November 1st, the Company shall have given notice that it does not wish to extend this Agreement. Notwithstanding
the foregoing, if a Change in Control of the Company shall be proposed to occur, or have occurred, during the original or any extended
term of this CIC Agreement, this CIC Agreement shall continue in effect until your termination of employment with the Company or its successor
or, when all amounts due under this CIC Agreement following a termination have been paid, whichever is later. |
| 2. | Change In Control. No benefits shall be payable under this CIC Agreement unless there shall have been a Change in Control
of the Company, as set forth herein. For purposes of this CIC Agreement, a “Change in Control” of the Company shall be deemed
to occur if any party or group acquires beneficial ownership of 20 percent or more of the voting shares of the Company; or if shareholder
approval is obtained for a transaction involving the acquisition of the Company through the purchase or exchange of the stock or assets
of the Company by merger or otherwise; or if more than one-third of the Board elected in a 12-month period or less are so elected without
the approval of a majority of the Board as constituted at the beginning of such period; or a liquidation or dissolution of Company. |
| 3. | Termination Following Change In Control. If any of the events described in Section 2 above constituting a Change in
Control of the Company shall have occurred, then unless the termination is (A) because of your death, Disability or Retirement, (B) by
the Company for Cause, or (C) by You other than for Good Reason, on the subsequent termination of your employment during the term of this
CIC Agreement, You shall be entitled to the severance benefits provided in Section 4.3 below if such termination occurs on or before the
second (2nd) anniversary of the Change in Control date (the “Change in Control Period”). If such termination occurs
before the Change in Control Date, You shall not be entitled to receive severance benefits under this CIC Agreement. |
3.1 Disability. If, as
a result of your incapacity due to physical or mental illness during the Change in Control Period You shall have been absent from the
full-time performance of your duties with the Company for six consecutive months, and within 30 days after written notice of termination
is given You shall not have returned to the full-time performance of your duties, your employment may be terminated for "Disability"
whereby, You would not be entitled to receive severance benefits in relation to a Change in Control.
3.2 Cause. Termination
by the Company of your employment for "Cause" shall mean termination as a result of:
3.2.1 The willful and continued failure
by You to substantially perform your duties with the Company as such employment was performed by You prior to the Change in Control or
any such actual or anticipated failure after the issuance by You of a Notice of Termination for Good Reason as defined herein after a
written demand for substantial performance is delivered to You by the Board of Directors, which demand specifically identifies the manner
in which the Board believes that You have not substantially performed your duties; or
3.2.2 The willful act by You in conduct
that is demonstrably and materially injurious to the Company, and which the Board deems to cause or will cause substantial economic damage
to the Company or injury to the business reputation of the Company, monetarily or otherwise. For purposes of this Section, no act, or
failure to act, on your part shall be deemed “willful" unless done, or omitted to be done, by You not in good faith and without
a reasonable belief that your action or omission was in the best interest of the Company. Notwithstanding the foregoing, You shall not
be deemed to have been terminated for Cause unless and until there shall have been delivered to You a copy of a resolution duly adopted
by the affirmative vote of not less than three-quarters of the entire membership of the Board at a meeting of the Board called and held
for such purpose (after reasonable notice to You and an opportunity for You, together with your counsel, to be heard before the Board),
finding that in the good faith opinion of the Board You were guilty of conduct set forth above in clauses 3.2.1 or 3.2.2 of this Section
and specifying the particulars in detail.
3.3 CIC Good Reason. You
shall be entitled to receive severance benefits as provided in this CIC Agreement if You terminate your employment with the Company for
“Good Reason.” For purposes of this CIC Agreement, "CIC Good Reason" shall mean, without your consent, the occurrence
in connection with a Change in Control of the Company of any of the following circumstances unless, in the case of Sections 3.3.1, 3.3.5,
3.3.6, 3.3.7, or 3.3.8, the circumstances are fully corrected prior to the Date of Termination specified in the Notice of Termination,
as defined in Sections 3.5 and 3.4, respectively, given in respect of them. If You terminate your employment with the Company for Good
Reason, as provided below, your employment with the Company shall be considered to have been involuntarily terminated by the Company:
3.3.1 The assignment to You of any significant
employment duties which are inconsistent with your status and position (i) prior to the Change in Control where such change is a direct
result of any pending Change in Control; or (ii) as such status exists immediately prior to the Change in Control of the Company, or (iii)
which are a substantial adverse alteration in the nature or status of your responsibilities from those in effect immediately prior to
the Change in Control of the Company whichever is applicable;
3.3.2 A reduction by the Company in your
annual base salary or participation in any incentive compensation programs as in effect on the initial date of this CIC Agreement, or
as same may be increased from time to time irrespective of future Company policies including any across-the-board salary reductions similarly
affecting all key employees of the Company;
3.3.3 Your relocation, without your consent,
to an employment location not within twenty-five (25) miles of your present designated office or job location, except for required travel
on the Company's business to an extent substantially consistent with your present business travel obligations;
3.3.4 The failure by the Company, without
your consent, to pay to You any part of your current compensation, or to pay to You any part of an installment of deferred compensation
under any deferred compensation program of the Company, within fourteen (14) days of the date the compensation is due;
3.3.5 The failure by the Company to continue
in effect any bonus to which You were entitled, or any compensation plan in which You participate (i) prior to the Change in Control where
such change is a direct result of any pending Change in Control, or (ii) immediately prior to the Change in Control of the Company that
is material to your total compensation, including but not limited to the Company's Restricted Stock Plan, 401(k) Plan, and other Benefit
Plans, or any substitute plans adopted prior to the Change in Control of the Company for which you are entitled under a separately executed
employment agreement, unless an equitable arrangement (embodied in an ongoing substitute or alternative plan) has been made with respect
to the plan, or the failure by the Company to continue your participation in it (or in such substitute or alternative plan) on a basis
not materially less favorable, both in terms of the amount of benefits provided and the level of your participation relative to other
participants, as existed at the time of the Change in Control;
3.3.6 The failure by the Company to continue
to provide You with (i) benefits substantially similar to those enjoyed by You under any of the Company's life insurance, medical, health
and accident, or disability plans in which You were participating at the time of the Change in Control of the Company was in effect for
the employees of the Company generally at the time of the Change in Control, (ii) the failure to continue to provide You with a Company
automobile or allowance in lieu of it at the time of the Change in Control of the Company, (iii) the taking of any action by the Company
that would directly or indirectly materially reduce any of such benefits or deprive You of any material fringe benefit enjoyed by You
at the time of the Change in Control of the Company, or (iv) the failure by the Company to provide You with the number of paid vacation
days to which You are entitled with the Company's normal vacation policy or other vacation allowance provided to you by written agreement
in effect at the time of the Change in Control of the Company;
3.3.7 The failure of the Company to obtain
a satisfactory agreement from any successor to assume and agree to perform this CIC Agreement, as contemplated in Section 5 of this CIC
Agreement; or
3.3.8 Any purported termination of your
employment that is not effected pursuant to a Notice of Termination satisfying the requirements of Section 3.4 below (and, if applicable,
the requirements of Section 3.2 above); for purposes of this CIC Agreement, no such purported termination shall be effective.
3.3.9 You cannot terminate your employment
for Good Reason unless You have provided written notice to the Company of the existence of the circumstances providing grounds for termination
for Good Reason within 90 days of the initial existence of such grounds and the Company has had at least 30 days from the date on which
such notice is provided to cure such circumstances, if curable. If You do not provide your Notice of Termination as set forth in Section
3.4 for Good Reason within 90 days after the first occurrence of the applicable grounds, then You will be deemed to have waived your right
to terminate for Good Reason with respect to such grounds.
3.4 Notice of Termination.
Any purported termination of your employment by the Company or by You shall be communicated by written Notice of Termination to the other
party to this CIC Agreement in accordance with Section 6 of this CIC Agreement. For purposes of this CIC Agreement, a "Notice of
Termination" shall mean a notice that shall indicate the specific termination provision in this CIC Agreement relied on and shall
set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of your employment under the provision
so indicated. Your rights to terminate your employment pursuant to this Section shall not be affected by your incapacity due to Disability.
In the event You deliver Notice of Termination based on circumstances set forth in Sections 3.3.1, 3.3.5, 3.3.6, 3.3.7, or 3.3.8 above,
which are fully corrected prior to the Date of Termination set forth in your Notice of Termination, the Notice of Termination shall be
deemed withdrawn and of no further force or effect.
3.5 Date of Termination, etc.
"Date of Termination" shall mean (A) if your employment is terminated for Disability, 30 days after Notice of Termination is
given (provided that You shall not have returned to the full-time performance of your duties during such 30-day period), and (B) if your
employment is terminated pursuant to Section 3.2 or 3.3 above or for any other reason (other than Disability), the date specified in the
Notice of Termination (which, in the case of a termination pursuant to Section 3.2 above shall not be less than 30 days, and in the case
of a termination pursuant to Section 3.3 above shall not be less than 30 nor more than 60 days, respectively, from the date the Notice
of Termination is given). However, if within 15 days after any Notice of Termination is given, or, if later, prior to the Date of Termination
(as determined without regard to this provision), the party receiving the Notice of Termination notifies the other party that a dispute
exists concerning the termination, then the Date of Termination shall be the date on which the dispute is finally determined, either by
mutual written agreement of the parties, by a binding arbitration award, or by a final judgment, order, or decree of a court of competent
jurisdiction (which is not appealable or with respect to which the time for appeal has expired and no appeal has been perfected). The
Date of Termination shall be extended by a notice of dispute only if the notice is given in good faith and the party giving the notice
pursues the resolution of the dispute with reasonable diligence. Notwithstanding the pendency of any such dispute, the Company will continue
to pay You your full compensation in effect when the notice giving rise to the dispute was given (including, but not limited to, base
salary) and continue You as a participant in all compensation, benefit, and insurance plans in which You were participating when the notice
giving rise to the dispute was given, until the dispute is finally resolved in accordance with this Section. Amounts paid under this Section
are in addition to all other amounts due under this CIC Agreement and shall not be offset against or reduce any other amounts due under
this CIC Agreement.
4. Compensation on Termination or During Disability.
Following a Change in Control of the Company, as defined by Section 2, on termination of your employment or during a period of Disability
You shall be entitled to the following benefits:
4.1 During any period that You fail to
perform your full-time duties with the Company as a result of incapacity due to Disability, You shall continue to receive your base salary
at the rate in effect at the commencement of any such period, together with all amounts payable to You under any compensation plan of
the Company during the period, until this CIC Agreement is terminated pursuant to section 3.1 above. Thereafter, or in the event your
employment shall be terminated by the Company or by You for Retirement, or by reason of your death, your benefits shall be determined
under the Company's retirement, insurance, and other compensation programs then in effect in accordance with the terms of those programs.
4.2 If your employment shall be terminated
by the Company for Cause or by You other than for Good Reason, Disability, death, or Retirement during a Change In Control Period, the
Company shall pay You your full base salary through the Date of Termination at the rate in effect at the time Notice of Termination is
given, plus all other amounts and benefits to which You are entitled under any compensation plan of the Company at the time the payments
are due. The Company shall have no obligations to You under this CIC Agreement.
4.3 On or before the second anniversary
of the Change In Control, if your employment by the Company shall be terminated (a) by the Company other than for Cause or Disability,
or (b) by You for Good Reason (as defined in Section 3.3 herein), then You shall be entitled to the benefits provided below:
4.3.1 The Company shall pay You your full
salary through the Date of Termination at the rate in effect at the time Notice of Termination is given, plus all other amounts and benefits
to which You are entitled under any compensation plan of the Company, at the time the payments are due, except as otherwise provided below.
4.3.2 In lieu of any further salary payments
to You for periods subsequent to the Date of Termination, the Company shall pay to You, as severance pay the following: (i) a lump sum
severance payment equal to two (2) times the average of your Compensation for the five (5) years prior to the occurrence of the circumstance
giving rise to the Notice of Termination (or if employed less than 5 years, the average annualized Compensation of the period worked to
date), plus (ii) the amounts in the forms set forth in paragraphs 4.3.3, 4.3.4 and 4.3.5 (the “Severance Payments”). Such
Severance Payments are further subject to any limitations which may apply in the context of a Change in Control as referenced in a separately
executed Employment Agreement.
4.3.3 If permitted under the terms of such
plans, the Company shall continue coverage for You and your dependents under any health or welfare benefit plan under which You and your
dependents were participating prior to the Change in Control for a period ending on the earlier to occur of (i) the date You become
covered by a new employer’s health and welfare benefit plan, (ii) the date You become covered by Medicare, or (iii) the date which
is twenty-four (24) months from the Date of Termination. The coverage for your dependents shall end earlier than (i), (ii) or (iii) if
required by the health or welfare benefit plan due to age eligibility.
4.3.4 The Company shall pay to You any
deferred compensation, including, but not limited to deferred bonuses, allocated or credited to You or your account as of the Date of
Termination.
4.3.5 Outstanding stock options or Restricted
Stock grants, if any, granted to You under the Company's Stock Plans which are not vested on Termination shall immediately vest.
4.3.6 Where You shall prevail in any action
against the Company to recover benefits hereunder, the Company shall also pay to You all reasonable legal and accounting fees and expenses
incurred by You as a result of the termination, including all such fees and expenses incurred by You as a result of the termination, (including
all such fees and expenses, if any, incurred in contesting or disputing any termination or in seeking to obtain or enforce any right or
benefit provided by this CIC Agreement or in connection with any tax audit or proceeding to the extent attributable to the application
of Code Section 4999 to any payment or benefit provided under this CIC Agreement) or any other agreement with the Company.
4.3.7 The amount of Severance Payments
due to You under this or any other relevant agreement with the Company shall be determined by the Board in its reasonable discretion.
The payments provided for in Paragraphs 4.3.2, 4.3.4 and 4.3.5 above, shall be made no later than the thirtieth (30th) day
following the Date of Termination. However, if the amounts of the payments cannot be finally determined on or before that day, the Company
shall pay to You on that day an estimate, as determined in good faith by the Company, of the minimum amount of such payments and shall
pay the remainder of those payments (together with interest at the rate provided in Section 1274(b)(2)(B) of the Code) as soon as the
amount can be determined but in no event later than two and a half months after the Date of Termination. In the event that the amount
of the estimated payments exceeds the amount subsequently determined to have been due, the excess shall constitute a loan by the Company
to You payable on the 30th day after demand by the Company (together with interest at the rate provided in Section 1274(b)(2)(B) of the
Code).
4.4 For purposes
of this CIC Agreement:
4.4.1 If your employment is terminated
in connection with the Change in Control “Compensation” shall mean two (2) times Your base salary plus two (2) times Your
targeted annual equity grant.
4.5 You shall not be required to mitigate the amount
of any payment provided for in this Section 4 by seeking other employment or otherwise, nor shall the amount of any payment or benefit
provided for in this Section 4 be reduced by any compensation earned by You as the result of employment by another employer, by retirement
benefits, by offset against any amount claimed to be owed by You to the Company, or otherwise except as specifically provided in this
Section 4.
4.6 In addition to all other amounts payable to You
under this Section 4, You shall be entitled to receive all qualified benefits payable to You under the Company's 401(k) Plan, Defined
Benefit Plan and any other plan or agreement relating to retirement benefits, in accordance with the terms of those Plans, to the extent
you were a participant in such Plan or Plans as of the date of a Change in Control.
5. Successors; Binding Agreement.
5.1 The Company will require any successor (whether
direct or indirect, by purchase, merger, consolidation, or otherwise) to all or substantially all of the business and/or assets of the
Company to expressly assume and agree to perform this CIC Agreement in the same manner and to the same extent that the Company would be
required to perform it if no such succession had taken place. Failure of the Company to obtain the assumption and agreement prior to the
effectiveness of any succession shall be a breach of this CIC Agreement and shall entitle You to compensation from the Company in the
same amount and on the same terms as You would have been entitled to under this CIC Agreement if You had terminated your employment for
Good Reason following a Change in Control of the Company, except that for purposes of implementing the foregoing, the date on which any
such succession becomes effective shall be deemed the Date of Termination.
5.2 This CIC Agreement shall inure to the benefit
of, and be enforceable by, your personal or legal representatives, executors, administrators, heirs, distributees, and legatees. If You
should die while any amount would still be payable to You if You had continued to live, all such amounts, unless otherwise provided in
this CIC Agreement, shall be paid in accordance with the terms of this CIC Agreement to your legatee or other designee or, if there is
no such designee, to your estate.
6. Notice For the purpose of this
CIC Agreement, all notices and other communications provided for in the CIC Agreement shall be in writing and shall be deemed to have
been duly given when delivered or mailed by United States registered or certified mail, return receipt requested, postage prepaid, addressed
to the respective addresses set forth on the first page of this CIC Agreement, provided that all notices to the Company shall be directed
to the attention of the Board with a copy to the President of the Company, or to such other address as either party may have furnished
to the other in writing in accordance this CIC Agreement, except that notice of a change of address shall be effective only on receipt.
7. Section 409A
7.1 This CIC Agreement is intended to comply with
Code Section 409A or an exemption thereunder and shall be construed and administered in accordance with Code Section 409A. Notwithstanding
any other provision of this CIC Agreement, payments provided under this CIC Agreement may only be made upon an event and in a manner that
complies with Code Section 409A or an applicable exemption. Any payments under this CIC Agreement that may be excluded from Code Section
409A either as separation pay due to an involuntary separation from service or as a short-term deferral shall be excluded from Code Section
409A to the maximum extent possible. For purposes of Code Section 409A, each installment payment provided under this CIC Agreement shall
be treated as a separate payment. Notwithstanding the foregoing, the Company makes no representations that the payments and benefits provided
under this CIC Agreement comply with Code Section 409A and in no event shall the Company be liable for all or any portion of any taxes,
penalties, interest, or other expenses that may be incurred by a Participant on account of non-compliance with Code Section 409A.
7.2 Notwithstanding any other provision of this CIC
Agreement, any Severance Payment under this CIC Agreement that (i) is determined to constitute “nonqualified deferred compensation”
within the meaning of Code Section 409A and (ii) is to be made under this CIC Agreement upon the Date of Termination shall only be made
upon a “separation from service” under Code Section 409A.
7.3 Notwithstanding any other provision of this CIC
Agreement, if any Severance Payment (i) is determined to constitute “nonqualified deferred compensation” within the meaning
of Code Section 409A and (ii) You are determined to be a “specified employee” as defined in Code Section 409A(a)(2)(b)(i),
then such Severance Payment shall not be paid until the first payroll date to occur following the six-month anniversary of Your “separation
from service” or, if earlier, on Your death (the “Specified Employee Payment Date”). The aggregate of any payments that
would otherwise have been paid before the Specified Employee Payment Date shall be paid to You in a lump sum on the Specified Employee
Payment Date and thereafter, any remaining payments shall be paid without delay in accordance with their original schedule.
8. Miscellaneous
8.1 No provision of this CIC Agreement may be modified,
waived, or discharged unless the waiver, modification, or discharge is agreed to in writing and signed by You and such officer as may
be specifically designated by the Board.
8.2 No waiver by either party to this CIC Agreement
at any time of any breach by the other party of, or compliance with, any condition or provision of this CIC Agreement to be performed
by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent
time.
8.3 No agreements or representations, oral or otherwise,
express, or implied, with respect to the subject matter of this CIC Agreement have been made by either party that are not expressly set
forth in this CIC Agreement.
8.4 Nothing in this CIC Agreement is intended to
reduce any benefits payable to You under any other agreement You may have with the Company or in any Company plan in which You may participate.
8.5 The validity, interpretation, construction, and
performance of this CIC Agreement shall be governed by the law of New Jersey without reference to its conflict of laws principles.
8.6 All references to sections of the Exchange Act
or the Code shall be deemed also to refer to any successor provisions to such sections. Any payments provided for shall be paid net of
any applicable withholding or deduction required under federal, state or local law.
8.7 The obligations of the Company under Section
4 shall survive the expiration of the term of this CIC Agreement.
9. Validity. The validity or enforceability
of any provision of this CIC Agreement shall not affect the validity or unenforceability of any other provision of this CIC Agreement,
which shall remain in full force and effect.
10. Counterparts. This CIC Agreement
may be executed in several counterparts, each of which shall be deemed to be an original but all of which together will constitute one
and the same instrument.
11. Arbitration. Any dispute or controversy
arising under or in connection with this CIC Agreement shall be settled exclusively by arbitration in New Jersey in accordance with the
rules of the American Arbitration Association then in effect. Judgment may be entered on the arbitrator's award in any court having jurisdiction.
However, you shall be entitled to seek specific performance of your right to be paid until the Date of Termination during the pendency
of any dispute or controversy arising under or in connection this CIC Agreement.
12. Entire Agreement. This CIC Agreement
sets forth the entire understanding of the parties with respect to its subject matter and supersedes all prior written or oral agreements
or understandings with respect to the subject matter.
In witness whereof, the parties have executed this
CIC Agreement as of the day and year first above written.
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MIDDLESEX WATER COMPANY |
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By: |
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Nadine Duchemin-Leslie |
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President & CEO |
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| ATTEST: |
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| Jay L. Kooper, Vice President, |
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| General Counsel & Secretary |
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/s/ |
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Georgia Simpson |
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Exhibit 10.5
CHANGE IN CONTROL AGREEMENT
This Change in Control Termination Agreement (the
“CIC Agreement”) is entered into as of November 1, 2024, between Middlesex Water Company (the “Company”),
a New Jersey corporation, and Robert Capko (referred to as “You” in this CIC Agreement).
Recitals
| A. | The Company considers it essential to the best interests of its shareholders to foster the continuous employment of key management
personnel. In this connection, the Board of Directors of the Company (the “Board”) recognizes that, as is the case with many
publicly held Companies, the possibility of a Change in Control may exist. This possibility, and the uncertainty and questions that it
may raise among management, may result in the departure or distraction of management personnel to the detriment of the Company and its
shareholders. |
| B. | The Board has determined that appropriate steps should be taken to reinforce and encourage the continued attention and dedication
of members of the Company’s management, including You, to the assigned duties without distraction in the face of circumstances arising
from the possibility of a Change in Control of the Company. |
| C. | To induce You to remain in the employ of the Company, while simultaneously representing the best interests of the Company’s
shareholders, and in consideration of your agreement set forth below, the Company agrees that You shall receive the severance benefits
set forth in this CIC Agreement in the event your employment with the Company is terminated by the Company, or is terminated by You for
“Good Reason,” as defined herein, in connection with a “Change in Control of the Company” (as defined in Section
2 below). |
Therefore, in consideration of your continued employment
and the parties’ agreement to be bound by the terms contained in this CIC Agreement, the parties agree as follows:
| 1. | Term of CIC Agreement. This CIC Agreement shall commence as of January 1, 2025. However, commencing on December 31,
2025, and each December 31 afterwards, the term of this Agreement shall automatically be extended for one (1) additional year unless,
no later than the preceding November 1st, the Company shall have given notice that it does not wish to extend this Agreement. Notwithstanding
the foregoing, if a Change in Control of the Company shall be proposed to occur, or have occurred, during the original or any extended
term of this CIC Agreement, this CIC Agreement shall continue in effect until your termination of employment with the Company or its successor
or, when all amounts due under this CIC Agreement following a termination have been paid, whichever is later. |
| 2. | Change In Control. No benefits shall be payable under this CIC Agreement unless there shall have been a Change in Control
of the Company, as set forth herein. For purposes of this CIC Agreement, a “Change in Control” of the Company shall be deemed
to occur if any party or group acquires beneficial ownership of 20 percent or more of the voting shares of the Company; or if shareholder
approval is obtained for a transaction involving the acquisition of the Company through the purchase or exchange of the stock or assets
of the Company by merger or otherwise; or if more than one-third of the Board elected in a 12-month period or less are so elected without
the approval of a majority of the Board as constituted at the beginning of such period; or a liquidation or dissolution of Company. |
| 3. | Termination Following Change In Control. If any of the events described in Section 2 above constituting a Change in
Control of the Company shall have occurred, then unless the termination is (A) because of your death, Disability or Retirement, (B) by
the Company for Cause, or (C) by You other than for Good Reason, on the subsequent termination of your employment during the term of this
CIC Agreement, You shall be entitled to the severance benefits provided in Section 4.3 below if such termination occurs on or before the
second (2nd) anniversary of the Change in Control date (the “Change in Control Period”). If such termination occurs
before the Change in Control Date, You shall not be entitled to receive severance benefits under this CIC Agreement. |
3.1 Disability. If, as
a result of your incapacity due to physical or mental illness during the Change in Control Period You shall have been absent from the
full-time performance of your duties with the Company for six consecutive months, and within 30 days after written notice of termination
is given You shall not have returned to the full-time performance of your duties, your employment may be terminated for "Disability"
whereby, You would not be entitled to receive severance benefits in relation to a Change in Control.
3.2 Cause. Termination
by the Company of your employment for "Cause" shall mean termination as a result of:
3.2.1 The willful and continued failure
by You to substantially perform your duties with the Company as such employment was performed by You prior to the Change in Control or
any such actual or anticipated failure after the issuance by You of a Notice of Termination for Good Reason as defined herein after a
written demand for substantial performance is delivered to You by the Board of Directors, which demand specifically identifies the manner
in which the Board believes that You have not substantially performed your duties; or
3.2.2 The willful act by You in conduct
that is demonstrably and materially injurious to the Company, and which the Board deems to cause or will cause substantial economic damage
to the Company or injury to the business reputation of the Company, monetarily or otherwise. For purposes of this Section, no act, or
failure to act, on your part shall be deemed “willful" unless done, or omitted to be done, by You not in good faith and without
a reasonable belief that your action or omission was in the best interest of the Company. Notwithstanding the foregoing, You shall not
be deemed to have been terminated for Cause unless and until there shall have been delivered to You a copy of a resolution duly adopted
by the affirmative vote of not less than three-quarters of the entire membership of the Board at a meeting of the Board called and held
for such purpose (after reasonable notice to You and an opportunity for You, together with your counsel, to be heard before the Board),
finding that in the good faith opinion of the Board You were guilty of conduct set forth above in clauses 3.2.1 or 3.2.2 of this Section
and specifying the particulars in detail.
3.3 CIC Good Reason. You
shall be entitled to receive severance benefits as provided in this CIC Agreement if You terminate your employment with the Company for
“Good Reason.” For purposes of this CIC Agreement, "CIC Good Reason" shall mean, without your consent, the occurrence
in connection with a Change in Control of the Company of any of the following circumstances unless, in the case of Sections 3.3.1, 3.3.5,
3.3.6, 3.3.7, or 3.3.8, the circumstances are fully corrected prior to the Date of Termination specified in the Notice of Termination,
as defined in Sections 3.5 and 3.4, respectively, given in respect of them. If You terminate your employment with the Company for Good
Reason, as provided below, your employment with the Company shall be considered to have been involuntarily terminated by the Company:
3.3.1 The assignment to You of any significant
employment duties which are inconsistent with your status and position (i) prior to the Change in Control where such change is a direct
result of any pending Change in Control; or (ii) as such status exists immediately prior to the Change in Control of the Company, or (iii)
which are a substantial adverse alteration in the nature or status of your responsibilities from those in effect immediately prior to
the Change in Control of the Company whichever is applicable;
3.3.2 A reduction by the Company in your
annual base salary or participation in any incentive compensation programs as in effect on the initial date of this CIC Agreement, or
as same may be increased from time to time irrespective of future Company policies including any across-the-board salary reductions similarly
affecting all key employees of the Company;
3.3.3 Your relocation, without your consent,
to an employment location not within twenty-five (25) miles of your present designated office or job location, except for required travel
on the Company's business to an extent substantially consistent with your present business travel obligations;
3.3.4 The failure by the Company, without
your consent, to pay to You any part of your current compensation, or to pay to You any part of an installment of deferred compensation
under any deferred compensation program of the Company, within fourteen (14) days of the date the compensation is due;
3.3.5 The failure by the Company to continue
in effect any bonus to which You were entitled, or any compensation plan in which You participate (i) prior to the Change in Control where
such change is a direct result of any pending Change in Control, or (ii) immediately prior to the Change in Control of the Company that
is material to your total compensation, including but not limited to the Company's Restricted Stock Plan, 401(k) Plan, and other Benefit
Plans, or any substitute plans adopted prior to the Change in Control of the Company for which you are entitled under a separately executed
employment agreement, unless an equitable arrangement (embodied in an ongoing substitute or alternative plan) has been made with respect
to the plan, or the failure by the Company to continue your participation in it (or in such substitute or alternative plan) on a basis
not materially less favorable, both in terms of the amount of benefits provided and the level of your participation relative to other
participants, as existed at the time of the Change in Control;
3.3.6 The failure by the Company to continue
to provide You with (i) benefits substantially similar to those enjoyed by You under any of the Company's life insurance, medical, health
and accident, or disability plans in which You were participating at the time of the Change in Control of the Company was in effect for
the employees of the Company generally at the time of the Change in Control, (ii) the failure to continue to provide You with a Company
automobile or allowance in lieu of it at the time of the Change in Control of the Company, (iii) the taking of any action by the Company
that would directly or indirectly materially reduce any of such benefits or deprive You of any material fringe benefit enjoyed by You
at the time of the Change in Control of the Company, or (iv) the failure by the Company to provide You with the number of paid vacation
days to which You are entitled with the Company's normal vacation policy or other vacation allowance provided to you by written agreement
in effect at the time of the Change in Control of the Company;
3.3.7 The failure of the Company to obtain
a satisfactory agreement from any successor to assume and agree to perform this CIC Agreement, as contemplated in Section 5 of this CIC
Agreement; or
3.3.8 Any purported termination of your
employment that is not effected pursuant to a Notice of Termination satisfying the requirements of Section 3.4 below (and, if applicable,
the requirements of Section 3.2 above); for purposes of this CIC Agreement, no such purported termination shall be effective.
3.3.9 You cannot terminate your employment
for Good Reason unless You have provided written notice to the Company of the existence of the circumstances providing grounds for termination
for Good Reason within 90 days of the initial existence of such grounds and the Company has had at least 30 days from the date on which
such notice is provided to cure such circumstances, if curable. If You do not provide your Notice of Termination as set forth in Section
3.4 for Good Reason within 90 days after the first occurrence of the applicable grounds, then You will be deemed to have waived your right
to terminate for Good Reason with respect to such grounds.
3.4 Notice of Termination.
Any purported termination of your employment by the Company or by You shall be communicated by written Notice of Termination to the other
party to this CIC Agreement in accordance with Section 6 of this CIC Agreement. For purposes of this CIC Agreement, a "Notice of
Termination" shall mean a notice that shall indicate the specific termination provision in this CIC Agreement relied on and shall
set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of your employment under the provision
so indicated. Your rights to terminate your employment pursuant to this Section shall not be affected by your incapacity due to Disability.
In the event You deliver Notice of Termination based on circumstances set forth in Sections 3.3.1, 3.3.5, 3.3.6, 3.3.7, or 3.3.8 above,
which are fully corrected prior to the Date of Termination set forth in your Notice of Termination, the Notice of Termination shall be
deemed withdrawn and of no further force or effect.
3.5 Date of Termination, etc.
"Date of Termination" shall mean (A) if your employment is terminated for Disability, 30 days after Notice of Termination is
given (provided that You shall not have returned to the full-time performance of your duties during such 30-day period), and (B) if your
employment is terminated pursuant to Section 3.2 or 3.3 above or for any other reason (other than Disability), the date specified in the
Notice of Termination (which, in the case of a termination pursuant to Section 3.2 above shall not be less than 30 days, and in the case
of a termination pursuant to Section 3.3 above shall not be less than 30 nor more than 60 days, respectively, from the date the Notice
of Termination is given). However, if within 15 days after any Notice of Termination is given, or, if later, prior to the Date of Termination
(as determined without regard to this provision), the party receiving the Notice of Termination notifies the other party that a dispute
exists concerning the termination, then the Date of Termination shall be the date on which the dispute is finally determined, either by
mutual written agreement of the parties, by a binding arbitration award, or by a final judgment, order, or decree of a court of competent
jurisdiction (which is not appealable or with respect to which the time for appeal has expired and no appeal has been perfected). The
Date of Termination shall be extended by a notice of dispute only if the notice is given in good faith and the party giving the notice
pursues the resolution of the dispute with reasonable diligence. Notwithstanding the pendency of any such dispute, the Company will continue
to pay You your full compensation in effect when the notice giving rise to the dispute was given (including, but not limited to, base
salary) and continue You as a participant in all compensation, benefit, and insurance plans in which You were participating when the notice
giving rise to the dispute was given, until the dispute is finally resolved in accordance with this Section. Amounts paid under this Section
are in addition to all other amounts due under this CIC Agreement and shall not be offset against or reduce any other amounts due under
this CIC Agreement.
4. Compensation on Termination or During Disability.
Following a Change in Control of the Company, as defined by Section 2, on termination of your employment or during a period of Disability
You shall be entitled to the following benefits:
4.1 During any period that You fail to
perform your full-time duties with the Company as a result of incapacity due to Disability, You shall continue to receive your base salary
at the rate in effect at the commencement of any such period, together with all amounts payable to You under any compensation plan of
the Company during the period, until this CIC Agreement is terminated pursuant to section 3.1 above. Thereafter, or in the event your
employment shall be terminated by the Company or by You for Retirement, or by reason of your death, your benefits shall be determined
under the Company's retirement, insurance, and other compensation programs then in effect in accordance with the terms of those programs.
4.2 If your employment shall be terminated
by the Company for Cause or by You other than for Good Reason, Disability, death, or Retirement during a Change In Control Period, the
Company shall pay You your full base salary through the Date of Termination at the rate in effect at the time Notice of Termination is
given, plus all other amounts and benefits to which You are entitled under any compensation plan of the Company at the time the payments
are due. The Company shall have no obligations to You under this CIC Agreement.
4.3 On or before the second anniversary
of the Change In Control, if your employment by the Company shall be terminated (a) by the Company other than for Cause or Disability,
or (b) by You for Good Reason (as defined in Section 3.3 herein), then You shall be entitled to the benefits provided below:
4.3.1 The Company shall pay You your full
salary through the Date of Termination at the rate in effect at the time Notice of Termination is given, plus all other amounts and benefits
to which You are entitled under any compensation plan of the Company, at the time the payments are due, except as otherwise provided below.
4.3.2 In lieu of any further salary payments
to You for periods subsequent to the Date of Termination, the Company shall pay to You, as severance pay the following: (i) a lump sum
severance payment equal to two (2) times the average of your Compensation for the five (5) years prior to the occurrence of the circumstance
giving rise to the Notice of Termination (or if employed less than 5 years, the average annualized Compensation of the period worked to
date), plus (ii) the amounts in the forms set forth in paragraphs 4.3.3, 4.3.4 and 4.3.5 (the “Severance Payments”). Such
Severance Payments are further subject to any limitations which may apply in the context of a Change in Control as referenced in a separately
executed Employment Agreement.
4.3.3 If permitted under the terms of such
plans, the Company shall continue coverage for You and your dependents under any health or welfare benefit plan under which You and your
dependents were participating prior to the Change in Control for a period ending on the earlier to occur of (i) the date You become
covered by a new employer’s health and welfare benefit plan, (ii) the date You become covered by Medicare, or (iii) the date which
is twenty-four (24) months from the Date of Termination. The coverage for your dependents shall end earlier than (i), (ii) or (iii) if
required by the health or welfare benefit plan due to age eligibility.
4.3.4 The Company shall pay to You any
deferred compensation, including, but not limited to deferred bonuses, allocated or credited to You or your account as of the Date of
Termination.
4.3.5 Outstanding stock options or Restricted
Stock grants, if any, granted to You under the Company's Stock Plans which are not vested on Termination shall immediately vest.
4.3.6 Where You shall prevail in any action
against the Company to recover benefits hereunder, the Company shall also pay to You all reasonable legal and accounting fees and expenses
incurred by You as a result of the termination, including all such fees and expenses incurred by You as a result of the termination, (including
all such fees and expenses, if any, incurred in contesting or disputing any termination or in seeking to obtain or enforce any right or
benefit provided by this CIC Agreement or in connection with any tax audit or proceeding to the extent attributable to the application
of Code Section 4999 to any payment or benefit provided under this CIC Agreement) or any other agreement with the Company.
4.3.7 The amount of Severance Payments
due to You under this or any other relevant agreement with the Company shall be determined by the Board in its reasonable discretion.
The payments provided for in Paragraphs 4.3.2, 4.3.4 and 4.3.5 above, shall be made no later than the thirtieth (30th) day
following the Date of Termination. However, if the amounts of the payments cannot be finally determined on or before that day, the Company
shall pay to You on that day an estimate, as determined in good faith by the Company, of the minimum amount of such payments and shall
pay the remainder of those payments (together with interest at the rate provided in Section 1274(b)(2)(B) of the Code) as soon as the
amount can be determined but in no event later than two and a half months after the Date of Termination. In the event that the amount
of the estimated payments exceeds the amount subsequently determined to have been due, the excess shall constitute a loan by the Company
to You payable on the 30th day after demand by the Company (together with interest at the rate provided in Section 1274(b)(2)(B) of the
Code).
4.4 For purposes
of this CIC Agreement:
4.4.1 If your employment is terminated
in connection with the Change in Control “Compensation” shall mean two (2) times Your base salary plus two (2) times Your
targeted annual equity grant.
4.5 You shall not be required to mitigate the amount
of any payment provided for in this Section 4 by seeking other employment or otherwise, nor shall the amount of any payment or benefit
provided for in this Section 4 be reduced by any compensation earned by You as the result of employment by another employer, by retirement
benefits, by offset against any amount claimed to be owed by You to the Company, or otherwise except as specifically provided in this
Section 4.
4.6 In addition to all other amounts payable to You
under this Section 4, You shall be entitled to receive all qualified benefits payable to You under the Company's 401(k) Plan, Defined
Benefit Plan and any other plan or agreement relating to retirement benefits, in accordance with the terms of those Plans, to the extent
you were a participant in such Plan or Plans as of the date of a Change in Control.
5. Successors; Binding Agreement.
5.1 The Company will require any successor (whether
direct or indirect, by purchase, merger, consolidation, or otherwise) to all or substantially all of the business and/or assets of the
Company to expressly assume and agree to perform this CIC Agreement in the same manner and to the same extent that the Company would be
required to perform it if no such succession had taken place. Failure of the Company to obtain the assumption and agreement prior to the
effectiveness of any succession shall be a breach of this CIC Agreement and shall entitle You to compensation from the Company in the
same amount and on the same terms as You would have been entitled to under this CIC Agreement if You had terminated your employment for
Good Reason following a Change in Control of the Company, except that for purposes of implementing the foregoing, the date on which any
such succession becomes effective shall be deemed the Date of Termination.
5.2 This CIC Agreement shall inure to the benefit
of, and be enforceable by, your personal or legal representatives, executors, administrators, heirs, distributees, and legatees. If You
should die while any amount would still be payable to You if You had continued to live, all such amounts, unless otherwise provided in
this CIC Agreement, shall be paid in accordance with the terms of this CIC Agreement to your legatee or other designee or, if there is
no such designee, to your estate.
6. Notice For the purpose of this
CIC Agreement, all notices and other communications provided for in the CIC Agreement shall be in writing and shall be deemed to have
been duly given when delivered or mailed by United States registered or certified mail, return receipt requested, postage prepaid, addressed
to the respective addresses set forth on the first page of this CIC Agreement, provided that all notices to the Company shall be directed
to the attention of the Board with a copy to the President of the Company, or to such other address as either party may have furnished
to the other in writing in accordance this CIC Agreement, except that notice of a change of address shall be effective only on receipt.
7. Section 409A
7.1 This CIC Agreement is intended to comply with
Code Section 409A or an exemption thereunder and shall be construed and administered in accordance with Code Section 409A. Notwithstanding
any other provision of this CIC Agreement, payments provided under this CIC Agreement may only be made upon an event and in a manner that
complies with Code Section 409A or an applicable exemption. Any payments under this CIC Agreement that may be excluded from Code Section
409A either as separation pay due to an involuntary separation from service or as a short-term deferral shall be excluded from Code Section
409A to the maximum extent possible. For purposes of Code Section 409A, each installment payment provided under this CIC Agreement shall
be treated as a separate payment. Notwithstanding the foregoing, the Company makes no representations that the payments and benefits provided
under this CIC Agreement comply with Code Section 409A and in no event shall the Company be liable for all or any portion of any taxes,
penalties, interest, or other expenses that may be incurred by a Participant on account of non-compliance with Code Section 409A.
7.2 Notwithstanding any other provision of this CIC
Agreement, any Severance Payment under this CIC Agreement that (i) is determined to constitute “nonqualified deferred compensation”
within the meaning of Code Section 409A and (ii) is to be made under this CIC Agreement upon the Date of Termination shall only be made
upon a “separation from service” under Code Section 409A.
7.3 Notwithstanding any other provision of this CIC
Agreement, if any Severance Payment (i) is determined to constitute “nonqualified deferred compensation” within the meaning
of Code Section 409A and (ii) You are determined to be a “specified employee” as defined in Code Section 409A(a)(2)(b)(i),
then such Severance Payment shall not be paid until the first payroll date to occur following the six-month anniversary of Your “separation
from service” or, if earlier, on Your death (the “Specified Employee Payment Date”). The aggregate of any payments that
would otherwise have been paid before the Specified Employee Payment Date shall be paid to You in a lump sum on the Specified Employee
Payment Date and thereafter, any remaining payments shall be paid without delay in accordance with their original schedule.
8. Miscellaneous
8.1 No provision of this CIC Agreement may be modified,
waived, or discharged unless the waiver, modification, or discharge is agreed to in writing and signed by You and such officer as may
be specifically designated by the Board.
8.2 No waiver by either party to this CIC Agreement
at any time of any breach by the other party of, or compliance with, any condition or provision of this CIC Agreement to be performed
by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent
time.
8.3 No agreements or representations, oral or otherwise,
express, or implied, with respect to the subject matter of this CIC Agreement have been made by either party that are not expressly set
forth in this CIC Agreement.
8.4 Nothing in this CIC Agreement is intended to
reduce any benefits payable to You under any other agreement You may have with the Company or in any Company plan in which You may participate.
8.5 The validity, interpretation, construction, and
performance of this CIC Agreement shall be governed by the law of New Jersey without reference to its conflict of laws principles.
8.6 All references to sections of the Exchange Act
or the Code shall be deemed also to refer to any successor provisions to such sections. Any payments provided for shall be paid net of
any applicable withholding or deduction required under federal, state or local law.
8.7 The obligations of the Company under Section
4 shall survive the expiration of the term of this CIC Agreement.
9. Validity. The validity or enforceability
of any provision of this CIC Agreement shall not affect the validity or unenforceability of any other provision of this CIC Agreement,
which shall remain in full force and effect.
10. Counterparts. This CIC Agreement
may be executed in several counterparts, each of which shall be deemed to be an original but all of which together will constitute one
and the same instrument.
11. Arbitration. Any dispute or controversy
arising under or in connection with this CIC Agreement shall be settled exclusively by arbitration in New Jersey in accordance with the
rules of the American Arbitration Association then in effect. Judgment may be entered on the arbitrator's award in any court having jurisdiction.
However, you shall be entitled to seek specific performance of your right to be paid until the Date of Termination during the pendency
of any dispute or controversy arising under or in connection this CIC Agreement.
12. Entire Agreement. This CIC Agreement
sets forth the entire understanding of the parties with respect to its subject matter and supersedes all prior written or oral agreements
or understandings with respect to the subject matter.
In witness whereof, the parties have executed this
CIC Agreement as of the day and year first above written.
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MIDDLESEX WATER COMPANY |
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By: |
/s/ |
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Nadine Duchemin-Leslie |
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President & CEO |
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| ATTEST: |
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| /s/ |
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| Jay L. Kooper, Vice President, |
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| General Counsel & Secretary |
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/s/ |
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Robert Capko |
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Exhibit 10.6
AMENDMENT TO CHANGE IN CONTROL AGREEMENT BETWEEN
MIDDLESEX WATER COMPANY AND NADINE DUCHEMIN-LESLIE
WHEREAS, the Company and the Executive entered into the Agreement,
which contains certain provisions regarding Change in Control Severance Benefits; and
WHEREAS the parties desire to amend the Agreement to modify the provisions
related to the Executive’s entitlements in the event of a Change in Control.
Amendment:
| 1. | Amendment to Section 4 (Compensation on Termination or During Disability): a. Section 4.3.2 ("Base Salary")
and 4.4 (“Compensation”) of the Agreement is hereby amended and restated in its entirety as follows: |
4.3.2 In lieu of any further salary payments to You for periods
subsequent to the Date of Termination, the Company shall pay to You, as severance pay the following: (i) a lump sum severance payment
equal to three (3) times your annual base salary at time of termination plus (ii) three (3) times your highest annual incentive compensation
earned or paid, over the last three (3) years prior to the year of termination, plus (iii) the amounts in the forms set forth in paragraphs
4.3.3, 4.3.4 and 4.3.5 (the “Severance Payments”)
4.4 Fully Deleted
| 2. | No Other Changes: Except as expressly amended herein, all other terms and conditions of the Agreement shall remain in full
force and effect. |
| 3. | Governing Law: This Amendment shall be governed by and construed in accordance with the laws of the State of New Jersey. |
| 4. | Counterparts: This Amendment may be executed in counterparts, each of which shall be deemed an original, but all of which together
shall constitute one and the same instrument. |
IN WITNESS WHEREOF, the parties hereto have executed this Amendment
as of this 4th day of November, 2024.
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MIDDLESEX WATER COMPANY |
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By: |
/s/ |
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Dennis W. Doll |
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Chairman of the Board |
| ATTEST: |
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| /s/ |
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| Jay L. Kooper, Vice President, |
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| General Counsel & Secretary |
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/s/ |
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Nadine Duchemin-Leslie |
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President and CEO |
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Middlesex Water (PK) (USOTC:MSEXP)
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De Nov 2024 até Dez 2024
Middlesex Water (PK) (USOTC:MSEXP)
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