Exhibit 10(ap)

 

Maine & Maritimes Corporation

 

 

EMPLOYEE RETENTION AGREEMENT

 

 

THIS EMPLOYEE RETENTION AGREEMENT dated as of  September 5, 2003 (this
“Agreement”) is entered into between Maine & Maritimes Corporation, a Maine
corporation (the “Company”), and Larry E. LaPlante (the “Executive”) (the
Company and Executive are sometimes referred to as “Party” or collectively
“Parties”).

 

RECITALS

 

WHEREAS, the Executive, has been employed by the Company in a management
capacity and is now its Vice President, Chief Accounting Officer, Controller,
Clerk, Asst. Treasurer and Asst. Secretary; and

 

WHEREAS, the Board of Directors of the Company has determined this Agreement to
be in the best interests of the stockholders of the Company, in order to
encourage the attention and dedication of the Executive to his assigned duties
with the Company without distraction in connection with potentially disruptive
circumstances arising from the possibility of a Change in Control (as defined
herein) or certain other events specified in this Agreement;

 

Now, THEREFORE, in consideration of the mutual promises and covenants contained
herein and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged by the Parties, the Company and the
Executive agree as follows:

 

Section 1.                                            Certain Definitions

 

As used herein, the following terms have the indicated meanings:

 

(1)          “Cause” for termination by the Company of the Executive’s
employment shall mean (i) the willful and continued failure by the Executive to
substantially perform his duties with the Company after a written notice is
delivered to the Executive by the Company, which notice specifically identifies
the manner in which the Company believes that the Executive has not
substantially performed the Executive’s duties; or (ii) the willful engaging by
the Executive in gross misconduct that is injurious to the Company, monetarily
or otherwise (including, without limitation, the Executive’s conviction, by a
court of competent jurisdiction, of a crime adversely reflecting on the
Executive’s honesty, trustworthiness or fitness to carry out the
responsibilities of his position with the Company). An act, or failure to act,
on the Executive’s part shall be deemed “willful” where such act is done, or not
done, by the Executive: (i) in the absence of good faith; or (ii) without a
reasonable belief that the Executive’s act, or failure to act, was in the best
interest of the Company.

 

(2)          For the purpose of this definition (“Change in Control”) only, the
term “Company,” first defined above, shall also be defined to include Maine
Public Service Company in addition to its parent, Maine & Maritime Corporation.
A “Change in Control “ shall be deemed to have occurred if the conditions set
forth in any one of the following paragraphs shall have been satisfied:

 

(a)          any “person” (as such term is used in Sections 13(d) and 14(d) of
the Securities Exchange Act of 1934, as amended) (other than the Company, any
trustee or other fiduciary holding securities under any employee benefit plan of
the Company, or any corporation owned directly or indirectly by the stockholders
of the Company in substantially the same proportion as their

 

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ownership of stock of the Company) is or becomes the “beneficial owner” (as
defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended),
directly or indirectly, of securities of the Company representing fifty percent
or more of the combined voting power of the Company’s then outstanding voting
securities;

 

(b)         a change in the composition of the Board of Directors of the
Company, as a result of which fewer than a majority of the directors are persons
who either (A) are directors of the Company as of the date hereof or (B) were
elected after nomination by a majority of the directors of the Company on the
date hereof and directors so elected previously;

 

(c)          any merger or consolidation of the Company, approved by the
stockholders of the Company, with any other corporation; other than:

 

(A)                              any such merger or consolidation that would
result in the voting securities of the Company outstanding immediately prior to
the merger or consolidation, continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving or
parent entity) more than fifty percent of the combined voting power of the
voting securities (entitled to vote generally for the election of directors) of
the Company or such surviving or parent entity outstanding immediately after
such merger or consolidation, or subsequently at any time as contemplated by or
as a result of, such merger or consolidation; or

 

(B)                                any such merger or consolidation where such
merger or consolidation is effected to implement a recapitalization or
reincorporation of the Company (or similar transaction) in which no “person” (as
such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of
1934, as amended) acquires fifty percent or more of the combined voting power of
the Company’s then-outstanding voting securities;

 

(d)         any merger or consolidation of the Company in which the Company is
not the continuing or surviving corporation or pursuant to which shares of the
Company’s stock, would be converted into cash, securities or other property;
other than a merger or consolidation of the Company in which the stockholders of
the Company immediately prior to the merger or consolidation have substantially
the same proportionate ownership and voting control of the surviving corporation
or parent entity immediately after the merger or consolidation;

 

(e)          except as described below, the Company ceases to be a reporting
company pursuant to Section 13 (a) of the Securities Exchange Act of 1934 as
amended, or any similar successor provision;

 

(f)            the number of the Company’s Outside Directors, as defined below,
is decreased by more than fifty percent in any twenty-five month period or the
number of the Company’s directors increased in such a manner that the Outside
Directors constitute less than a majority of the Board;

 

(g)         the stockholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale, lease, exchange,
liquidation, disposition or other transfer (in one transaction or a series of
transactions) by the Company of all or substantially all of the Company’s assets
(or any transaction having a similar effect).

 

(h)         further, a “Change in Control” shall not be deemed to occur if the
conditions set forth in the following sub-paragraph shall have been satisfied:

 

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(A)                              a merger, consolidation or reorganization of
the Company if, upon consummation of such transaction all of the outstanding
voting stock of the Company is owned, directly or indirectly, by a holding
company, and the holders of the Company’s common stock immediately prior to the
transaction have substantially the same proportionate ownership and voting
control of the holding company.

 

(3)                                  “Good Reason” for termination by the
Executive of the Executive’s employment shall mean the occurrence of any one of
the following acts unless such act is corrected prior to the Termination Date
specified in the Termination Notice given in respect thereof or, in the case of
paragraph (d) below, such act is not objected to in writing by the Executive
within four months after notification by the Company to the Executive of the
Company’s intention to take the action contemplated by such paragraph (d):

 

(a)                                  the assignment of duties to the Executive
which:

 

(i)                                     are materially different from his duties
immediately prior to the Change in Control, or

 

(ii)                                  result in his having significantly less
authority or responsibility than he had prior to the Change in Control;

 

(b)                                 the Executive’s removal from, or any failure
to re-elect him to, any position he held immediately prior to the Change in
Control;

 

(c)                                  a reduction of the Executive’s annual base
salary in effect on the date of the Change in Control or as the same may be
increased from time to time thereafter;

 

(d)                                 the Company’s transferring or assigning the
Executive to a place of employment more than one hundred miles from Presque
Isle, Maine, except where: (1) such transfer or assignment is to a subsidiary or
affiliate entity location, consistent with the Executive’s duties; and (2) in
connection with required business travel to an extent substantially consistent
with the Executive’s business travel obligations immediately prior to the Change
in Control;

 

(e)                                  the Company’s failure to provide the
Executive with substantially the same health, life and other employee benefit
plans, programs and arrangements (specifically including the Company’s
compensation and incentive plans, as the same may be amended in the future), and
substantially the same perquisites of employment, as provided to him immediately
prior to the Change in Control or as the same may be increased thereafter;

 

(f)                                    the Company’s failure to provide the
Executive with substantially the same support staff as provided to him
immediately prior to the Change in Control; or

 

(g)                                 the Company’s failure to increase the
Executive’s salary, employee benefits or perquisites of employment in a manner
or amount commensurate with increases provided to the Company’s other executive
officers.

 

(4)                                  “Outside Directors” an “Outside Director”
as of a given date, shall mean a member of the Company’s board of directors who
has been a director of the Company throughout the six month period prior to such
date and who has not been an employee of the Company at any time during such six
month period.

 

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(5)                                  “Termination Date” shall have the meaning
stated in Section 2(2).

 

(6)                                  “Termination Notice” shall have the meaning
stated in Section 2(1).

 

Section 2.                                            Termination Procedures

 

(1)                                  Termination Notice. Any purported
termination of the Executive’s employment (other than by reason of death, or at
will termination) shall be communicated by a written notice of the terminating
party (a “Termination Notice”) in accordance with Section 6 (2).

 

(2)                                  Termination Date. “Termination Date” shall
mean the date as of which the Executive’s employment is to terminate as
specified in the Termination Notice, which, in the case of a termination by the
Company otherwise than for Cause, may be the same date of the Termination Notice
and, in the case of a termination by the Executive, shall not be less than
fourteen days nor more than sixty days, respectively, from the date the
Termination Notice is given, unless otherwise agreed to by the parties.

 

Section 3.                                            Benefits Upon Certain
Terminations

 

(1)                                  General. If a Change of Control occurs and,
within one year following the occurrence of such Change of Control (i) the
Company terminates the Executive’s employment for any reason other than for
Cause, or (ii) the Executive terminates his employment for Good Reason, then in
lieu of any further salary payments to the Executive for periods subsequent to
the Termination Date, the Company shall provide the Executive with the
following:

 

(a)                                  Within thirty business days after the
Termination Date, a lump sum cash payment equal to the sum of: (i) two hundred
percent (200%) of the Executive’s annual base salary in effect upon the Change
in Control or the date of the Termination Notice, whichever is higher, and (ii)
two hundred percent (200%) of the bonus award the Executive would have received
for the year in which such termination occurs pursuant to the Company’s
Incentive Compensation Plan, assuming that his employment had not terminated and
that for such year all applicable performance goals will be met. In the event
any portion of this award depends on goals that cannot be determined until the
close of the plan year, then payment of that amount shall be made within thirty
days after the goal has been determined.

 

(b)                                 The continuation of the Executive’s
participation and the participation of his dependants (to the extent they were
participating on the date of the Termination Notice) in the Company’s health,
life, disability and other employee benefit plans, programs and arrangements
(excluding the Pension Plan and the Non-Union Retirement Savings Plan) for a
period of twenty-four (24) months after such termination as if he were still
employed during such period; provided, however, if such participation in any
such plan, program or arrangement is specifically prohibited by the terms
thereof, the Company shall provide the Executive (and his dependants) with
benefits substantially similar to those which he was entitled to receive under
such plan, program or arrangement immediately prior to his termination of
employment. Additionally, at the end of any period of such coverage, the
Executive shall have the right to have assigned to him, for the cash surrender
value thereof, any assignable insurance owned by the Company on the life of the
Executive. For purposes of this paragraph 3(b), any employee benefit determined
with reference to the Executive’s compensation or earnings shall be based on his
annual base salary unless otherwise provided under the terms of the applicable
employee benefit plan, program or arrangement.

 

(2)                                  Death, at will termination. Notwithstanding
any provision of this Agreement to the contrary, no benefits are payable
hereunder upon the Executive’s death prior to: (1) the involuntary

 

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termination of his employment with the Company for Cause or otherwise, or (2)
the voluntary termination by the Executive of the Executive’s employment with
the Company for Good Reason. No benefits are payable hereunder upon the
Company’s at will termination of employment for reasons other than those set
forth in this Agreement.

 

Section 4.                                            Term of Agreement

 

This Agreement initially shall continue in effect until the third anniversary of
the date hereof.

 

Section 5.                                            Successors

 

In addition to any obligations imposed by law upon any successor to the Company,
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
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 such assumption and agreement prior to the effectiveness of
any such succession shall be a breach of this Agreement and shall entitle the
Executive to compensation from the Company in the same amount and on the same
terms as the Executive would be entitled to hereunder if the Executive were to
terminate the Executive’s employment for Good Reason, except that, for purposes
of implementing the foregoing, the date on which any such succession becomes
effective shall be deemed the Termination Date.

 

Section 6.                                          Miscellaneous

 

(1)                                  Amendments. This Agreement may not be
amended, modified or supplemented by the parties hereto in any manner, except by
an instrument in writing signed on behalf of each of the parties hereto.

 

(2)                                  Notices. Any notice, request, instruction
or other document to be given hereunder by any party to the other shall be in
writing and delivered personally or sent by certified mail, postage prepaid, by
facsimile (with receipt confirmed), or by courier service and shall be effective
upon receipt if addressed or sent as follows:

 

To the Company:

 

Maine & Maritimes Corporation

 

 

P. 0. Box 789, Presque Isle, ME 04769-0789

 

 

Fax:

207-760-2498

 

 

 

Attention:

J. Nick Bayne

 

 

 

 

To the Executive:

 

Larry E. LaPlante

 

 

125 Fleetwood Street

 

 

Presque Isle, ME 04769-3031

 

 

Fax:

207-760-2498

 

 

or to such other address or person as may be designated in writing by a party,
by a notice given to the others as aforesaid.

 

(3)                                  No Additional Effect. Except as expressly
provided herein, nothing contained herein shal be construed to provide the
Executive with any specific period of employment, right to be retained in the
service of the Company or other rights, nor shall this Agreement be construed to
otherwise limit the right: of the Company to discharge or take other action with
respect to the Executive. The Executive hereb3 acknowledges that he or she
remains an employee at will of the Company and that any rights of the

 

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Executive arising under this Agreement arise only upon the circumstances
specifically set forth in this Agreement.

 

(4)                                  Construction. The headings in this
Agreement are included only for convenience and shall not affect the meaning or
interpretation of this Agreement. The words “herein” and “hereof’ and other
words of similar import refer to this Agreement as a whole and not to any
particular part of this Agreement. The word “including” as used herein shall not
be construed so as to exclude any other thing not referred to or described. The
Outside Directors shall have the authority to construe and interpret this
Agreement on behalf of the Company, and any such determination by the Outside
Directors shall be the conclusive construction on behalf of the Company.

 

(5)                                  Entire Agreement, Assignability, etc. This
Agreement (i) constitutes the entire agreement, and supersedes all other prior
agreements, including without limitation prior employee continuity agreements,
and understandings, both written and oral, between the parties with respect to
the subject matter hereof, (ii) is not intended to confer upon any person other
than the parties hereto any rights or remedies hereunder, except as otherwise
expressly provided herein, and (iii) shall not be assignable by operation of law
or otherwise. No provisions of this Agreement are intended, nor will be
interpreted, to provide or create any third party beneficiary rights or any
other rights of any kind in any person unless specifically provided otherwise
herein, and, except as so provided, all provisions hereof will be personal
solely among the parties to this Agreement.

 

(6)                                  Validity. The invalidity or
unenforceability of any provisions of this Agreement shall not affect the
validity or enforceability of any other provisions of this Agreement, each of
which shall remain in full force and effect.

 

(7)                                  Governing Law. This Agreement shall be
governed by the laws of the State of Maine, regardless of the laws that
otherwise might govern under applicable principles of conflicts of laws thereof.

 

(8)                                  Counterparts. This Agreement may be
executed in counterparts, each of which shall be deemed to be an original but
both of which together shall constitute one and the same instrument.

 

(9)                                  Funding. This Agreement shall not be
construed to create or require the Company to create a trust or to otherwise act
to fund the amounts payable hereunder.

 

(10)                            Limitation on Amount to be Paid. If payment of
any amount under this Agreement would cause the Executive to be subject to an
excise tax pursuant to Section 4999 of the Internal Revenue Code (as amended
from time to time) or the regulations thereunder, then such amount shall not be
paid to the extent necessary to avoid the imposition of such tax. The preceding
sentence shall apply only if the aggregate amount payable to the Executive or
for his or her benefit under this Agreement, after payment of such excise tax,
would be less than the aggregate amount payable in accordance with the preceding
sentence.

 

(11)                            Arbitration. The Parties agree to resolve all
disputes arising under this Agreement in arbitration as follows:

 

(a)                                  Any arbitration under this Agreement, and
any related judicial proceeding, shall be initiated and shall proceed pursuant
to the provisions of the Maine Uniform Arbitration Act (the “Act”) and, to the
extent consistent with the Act, the then prevailing rules of the American
Arbitration Association (the “Association”) for labor and employment contracts.
To initiate arbitration hereunder, demand shall be given in writing to the
Association and the other Party no later than one year after the

 

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claim arises. Any claim for which such demand is not made within one year after
the claim arises shall be barred and discharged.

 

(b)                                 Any arbitration under this Agreement shall
be before a single arbitrator mutually acceptable to the Parties, and an award
in such arbitration may include only damages which the arbitrator determines to
be due under express provisions of this Agreement. The arbitrator shall have no
authority to award any other damages including without limitation, consequential
and exemplary damages. Any award in arbitration shall be subject to enforcement
and appeal pursuant to the Act.

 

(c)                                  The Parties shall share equally all costs
and fees charged by the Association or the arbitrator.

 

(12)                            Execution of Further Documents. In the event the
Executive receives payments or benefits pursuant to this Agreement and the
Company’s legal counsel deems it necessary for the Company to receive a release
or other acknowledgement the Executive agrees to execute any such document as
may be reasonably required as a condition of his/her receipt of such payment or
benefits.

 

IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the date
first above written.

 

 

 

MAINE & MARITIMES CORPORATION

 

 

 

 

 

/s/ Nathan L. Grass

 

 

By:

 

Title:

 

 

 

 

 

EXECUTIVE

 

 

 

 

 

/s/ Larry E. LaPlante

 

 

Name:

 

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