**Exhibit 10(as)**

 

**MainePublic Service Company**

 

 

**EMPLOYEERETENTION AGREEMENT**

 

THIS EMPLOYEE RETENTION AGREEMENT dated as September 5, 2003 (this“Agreement”) is entered into between Maine Public Service Company, a Mainecorporation (the “Company”), and Brent M. Boyles (the “Executive”) (the Companyand Executive are sometimes referred to as “Party” or collectively “Parties”).

 

**RECITALS**

 

WHEREAS, the Executive, has been employed by the Company in amanagement capacity and is now its Senior Vice President, Operations; and

 

WHEREAS, the Board of Directors of the Company has determined thisAgreement to be in the best interests of the stockholders of the Company, inorder to encourage the attention and dedication of the Executive to hisassigned duties with the Company without distraction in connection withpotentially disruptive circumstances arising from the possibility of a Changein Control (as defined herein) or certain other events specified in thisAgreement;

 

Now, THEREFORE, in consideration of the mutual promises and covenantscontained herein and for other good and valuable consideration, the receipt andsufficiency of which is hereby acknowledged by the Parties, the Company and theExecutive agree as follows:

 

Section 1.                                            **CertainDefinitions**

 

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

 

(1)*           “Cause”*for termination bythe Company of the Executive’s employment shall mean (i) the willful andcontinued failure by the Executive to substantially perform his duties with theCompany after a written notice is delivered to the Executive by the Company,which notice specifically identifies the manner in which the Company believesthat the Executive has not substantially performed the Executive’s duties; or(ii) the willful engaging by the Executive in gross misconduct that isinjurious to the Company, monetarily or otherwise (including, withoutlimitation, the Executive’s conviction, by a court of competent jurisdiction,of a crime adversely reflecting on the Executive’s honesty, trustworthiness orfitness to carry out the responsibilities of his position with the Company). Anact, or failure to act, on the Executive’s part shall be deemed “willful” wheresuch act is done, or not done, by the Executive: (i) in the absence of goodfaith; or (ii) without a reasonable belief that the Executive’s act, or failureto act, was in the best interest of the Company.

 

(2)*                                 *A*“Change inControl”*shall be deemed to have occurred if the conditions setforth 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 SecuritiesExchange Act of 1934, as amended) (other than the Company, any trustee or otherfiduciary holding securities under any employee benefit plan of the Company, orany corporation owned directly or indirectly by the stockholders of the Companyin substantially the same proportion as their ownership of stock of theCompany) is or becomes the “beneficial owner” (as defined in Rule 13d-3 underthe Securities Exchange Act of 1934, as amended), directly or indirectly, ofsecurities of the

 

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Company representing fifty percent or more of the combined voting powerof the Company’s then outstanding voting securities;

 

(b)           achange in the composition of the Board of Directors of the Company, as a resultof which fewer than a majority of the directors are persons who either (A) aredirectors of the Company as of the date hereof or (B) were elected afternomination by a majority of the directors of the Company on the date hereof anddirectors so elected previously;

 

(c)                                  any merger orconsolidation of the Company, approved by the stockholders of the Company, withany other corporation; *other than:*

 

(A)          any such merger or consolidation thatwould result in the voting securities of the Company outstanding immediatelyprior to the merger or consolidation, continuing to represent (either byremaining outstanding or by being converted into voting securities of thesurviving or parent entity) more than fifty percent of the combined votingpower of the voting securities (entitled to vote generally for the election ofdirectors) of the Company or such surviving or parent entity outstandingimmediately after such merger or consolidation, or subsequently at any time ascontemplated by or as a result of, such merger or consolidation; or

 

(B)           any such merger or consolidationwhere such merger or consolidation is effected to implement a recapitalizationor 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 ExchangeAct of 1934, as amended) acquires fifty percent or more of the combined votingpower of the Company’s then-outstanding voting securities;

 

(d)           anymerger or consolidation of the Company in which the Company is not thecontinuing or surviving corporation or pursuant to which shares of theCompany’s stock, would be converted into cash, securities or other property; *other than*amerger or consolidation of the Company in which the stockholders of the Companyimmediately prior to the merger or consolidation have substantially the sameproportionate ownership and voting control of the surviving corporation orparent entity immediately after the merger or consolidation;

 

(e)           exceptas described below, the Company ceases to be a reporting company pursuant toSection 13 (a) of the Securities Exchange Act of 1934 as amended, or anysimilar successor provision;

 

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

 

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

 

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

 

(A)                              amerger, consolidation or reorganization of the Company if, upon consummation ofsuch transaction all of the outstanding voting stock of the Company is owned,

 

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directly or indirectly, by a holding company, and the holders of theCompany’s common stock immediately prior to the transaction have substantiallythe same proportionate ownership and voting control of the holding company.

 

(3)*           “Good Reason”*fortermination by the Executive of the Executive’s employment shall mean theoccurrence of any one of the following acts unless such act is corrected priorto the Termination Date specified in the Termination Notice given in respectthereof or, in the case of paragraph (d) below, such act is not objected to inwriting by the Executive within four months after notification by the Companyto the Executive of the Company’s intention to take the action contemplated bysuch paragraph (d):

 

(a)                                  the assignment ofduties to the Executive which:

 

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

 

(ii)                                  result in his havingsignificantly less authority or responsibility than he had prior to the Changein Control;

 

(b)                                 the Executive’sremoval from, or any failure to re-elect him to, any position he heldimmediately prior to the Change in Control;

 

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

 

(d)                                 the Company’stransferring or assigning the Executive to a place of employment more than onehundred miles from Presque Isle, Maine, except where: (1) such transfer orassignment is to a subsidiary or affiliate entity location, consistent with theExecutive’s duties; and (2) in connection with required business travel to anextent substantially consistent with the Executive’s business travelobligations immediately prior to the Change in Control;

 

(e)                                  the Company’s failureto provide the Executive with substantially the same health, life and otheremployee benefit plans, programs and arrangements (specifically including theCompany’s compensation and incentive plans, as the same may be amended in thefuture), and substantially the same perquisites of employment, as provided tohim immediately prior to the Change in Control or as the same may be increasedthereafter;

 

(f)                                    the Company’sfailure to provide the Executive with substantially the same support staff asprovided to him immediately prior to the Change in Control; or

 

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

 

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

 

(5)*                                  “TerminationDate”*shall have the meaning stated in Section 2(2).

 

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(6)*                                  “TerminationNotice”*shall have the meaning stated in Section 2(1).

 

Section 2.                                            **TerminationProcedures**

 

(1)*           Termination Notice.*Anypurported termination of the Executive’s employment (other than by reason ofdeath or at will termination) shall be communicated by a written notice of theterminating party (a “Termination Notice”) in accordance with Section 6(2).

 

(2)*           Termination Date.*“TerminationDate” shall mean the date as of which the Executive’s employment is toterminate as specified in the Termination Notice, which, in the case of atermination by the Company otherwise than for Cause, may be the same date ofthe 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 bythe parties.

 

Section 3.                                          **BenefitsUpon Certain Terminations**

 

(1)*           General.*If a Change ofControl occurs and, within one year following the occurrence of such Change ofControl (i) the Company terminates the Executive’s employment for any reasonother than for Cause, or (ii) the Executive terminates his employment for GoodReason, then in lieu of any further salary payments to the Executive forperiods subsequent to the Termination Date, the Company shall provide theExecutive with the following:

 

(a)           Withinthirty business days after the Termination Date, a lump sum cash payment equalto: (i) the sum of two hundred percent (200%) of the Executive’s annual basesalary in effect upon the Change in Control or the date of the TerminationNotice, whichever is higher, and (ii) two hundred percent (200%) of the bonusaward the Executive would have received for the year in which such terminationoccurs pursuant to the Company’s Incentive Compensation Plan, assuming that hisemployment had not terminated and that for such year all applicable performancegoals will be met. In the event any portion of this award depends on goals thatcannot be determined until the close of the plan year, then payment of thatamount shall be made within thirty days after the goal has been determined.

 

(b)           Thecontinuation of the Executive’s participation and the participation of hisdependants (to the extent they were participating on the date of theTermination Notice) in the Company’s health, life, disability and otheremployee benefit plans, programs and arrangements (excluding the Pension Planand the Non-Union Retirement Savings Plan). for a period of twentyfour (24)months after such termination as if he were still employed during such period;provided, however, if such participation in any such plan, program orarrangement is specifically prohibited by the terms thereof, the Company shallprovide the Executive (and his dependants) with benefits substantially similarto those which he was entitled to receive under such plan, program orarrangement immediately prior to his termination of employment. Additionally,at the end of any period of such coverage, the Executive shall have the rightto have assigned to him, for the cash surrender value thereof, any assignableinsurance owned by the Company on the life of the Executive. For purposes ofthis paragraph 3(b), any employee benefit determined with reference to theExecutive’s compensation or earnings shall be based on his annual base salaryunless otherwise provided under the terms of the applicable employee benefitplan, program or arrangement.

 

(2)*           Death, at will termination.*Notwithstandingany provision of this Agreement to the contrary, no benefits are payablehereunder upon the Executive’s death prior to: (1) the involuntary terminationof his employment with the Company for Cause or otherwise, or (2) the voluntarytermination by the Executive of the Executive’s employment with the Company forGood Reason. No benefits are

 

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payable hereunder upon the Company’s at will termination of employmentfor reasons other than those set forth in this Agreement.

 

Section 4.                                            **Term ofAgreement**

 

This Agreement initially shall continue in effect until the thirdanniversary of the date hereof. Section 5.

 

Section 5.                                            **Successors**

 

In addition to any obligations imposed by law upon any successor to theCompany, the Company will require any successor (whether direct or indirect, bypurchase, merger, consolidation or otherwise) to all or substantially all ofthe business and/or assets of the Company to expressly assume and agree toperform this Agreement in the same manner and to the same extent that theCompany 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 theeffectiveness of any such succession shall be a breach of this Agreement andshall entitle the Executive to compensation from the Company in the same amountand on the same terms as the Executive would be entitled to hereunder if theExecutive were to terminate the Executive’s employment for Good Reason, exceptthat, for purposes of implementing the foregoing, the date on which any suchsuccession becomes effective shall be deemed the Termination Date.

 

Section 6.                                            **Miscellaneous**

 

(1)*           Amendments.*This Agreementmay not be amended, modified or supplemented by the parties hereto in anymanner, except by an instrument in writing signed on behalf of each of theparties hereto.

 

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

 
| To the Company:   |   | Maine Public Service Company               |
|-------------------|--------|--------------------------------------------|
|              |   | P. 0. Box 789, Presque Isle, ME 04769-0789 |
|              |   | Fax:                                       | 207-760-2498 |   |
|              |   | Attention:                                 | J. Nick Bayne |   |
|              |   |                                       |
| To the Executive: |   | Brent M. Boyles                            |
|              |   | P. 0. Box 1707                             |
|              |   | Presque Isle, ME 04769-1707                |
|              |   | Fax:                                       | 207-760-2498 |   |
|                   |        |                                            |  |  |  |

 

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

 

(3)*           No Additional Effect.*Exceptas expressly provided herein, nothing contained herein shall be construed to providethe Executive with any specific period of employment, right to be retained inthe service of the Company or other rights, nor shall this Agreement beconstrued to otherwise limit the rights of the Company to discharge or takeother action with respect to the Executive. The Executive hereby acknowledgesthat he or she remains an employee at will of the Company and that any rightsof the Executive arising under this Agreement arise only upon the circumstancesspecifically set forth in this Agreement.

 

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(4)*           Construction.*The headingsin this Agreement are included only for convenience and shall not affect themeaning 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 toany particular part of this Agreement. The word “including” as used hereinshall not be construed so as to exclude any other thing not referred to ordescribed. The Outside Directors shall have the authority to construe andinterpret this Agreement on behalf of the Company, and any such determinationby the Outside Directors shall be the conclusive construction on behalf of theCompany.

 

(5)*           Entire Agreement, Assignability, etc.*This Agreement (i) constitutes the entire agreement, and supersedesall other prior agreements, including without limitation prior employeecontinuity agreements, and understandings, both written and oral, between theparties with respect to the subject matter hereof, (ii) is not intended toconfer upon any person other than the parties hereto any rights or remedieshereunder, except as otherwise expressly provided herein, and (iii) shall notbe assignable by operation of law or otherwise. No provisions of this Agreementare intended, nor will be interpreted, to provide or create any third partybeneficiary rights or any other rights of any kind in any person unlessspecifically provided otherwise herein, and, except as so provided, allprovisions hereof will be personal solely among the parties to this Agreement.

 

(6)*           Validity.*The invalidityor unenforceability of any provisions of this Agreement shall not affect thevalidity or enforceability of any other provisions of this Agreement, each ofwhich shall remain in full force and effect.

 

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

 

(8)*                                  Counterparts.*This Agreement may be executed in counterparts, each of which shall be deemedto be an original but both of which together shall constitute one and the sameinstrument.

 

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

 

(10)*                            Limitationon Amount to be Paid.*If payment of any amount under this Agreement wouldcause the Executive to be subject to an excise tax pursuant to Section *4999*ofthe Internal Revenue Code (as amended from time to time) or the regulationsthereunder, then such amount shall not be paid to the extent necessary to avoidthe imposition of such tax. The preceding sentence shall apply only if theaggregate amount payable to the Executive or for his or her benefit under thisAgreement, after payment of such excise tax, would be less than the aggregateamount payable in accordance with the preceding sentence.

 

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

 

(a)           Any arbitrationunder this Agreement, and any related judicial proceeding, shall be initiatedand shall proceed pursuant to the provisions of the Maine Uniform ArbitrationAct (the “Act”) and, to the extent consistent with the Act, the then prevailingrules of the American Arbitration Association (the “Association”) for labor andemployment contracts. To initiate arbitration hereunder, demand shall be givenin writing to the Association and the other Party no later than one year afterthe claim arises. Any claim for which such demand is not made within one yearafter the claim arises shall be barred and discharged.

 

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(b)           Any arbitrationunder this Agreement shall be before a single arbitrator mutually acceptable tothe Parties, and an award in such arbitration may include only damages whichthe arbitrator determines to be due under express provisions of this Agreement.The arbitrator shall have no authority to award any other damages includingwithout limitation, consequential and exemplary damages. Any award inarbitration shall be subject to enforcement and appeal pursuant to the Act.

 

(c)                                  TheParties shall share equally all costs and fees charged by the Association orthe arbitrator.

 

(12)*         Execution of Further Documents.*Inthe event the Executive receives payments or benefits pursuant to thisAgreement and the Company’s legal counsel deems it necessary for the Company toreceive a release or other acknowledgement the Executive agrees to execute anysuch document as may be reasonably required as a condition of his/her receiptof such payment or benefits.

 

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

 

 
|   | **MAINE PUBLIC SERVICE COMPANY** |
|--------|----------------------------------|
|   |                             |
|   |                             |
|   | **/s/ Nathan L. Grass**          |   |
|   | **By:**                          |
|   | **Title:**                       |
|   |                             |
|   |                             |
|   | **EXECUTIVE**                    |
|   |                             |
|   |                             |
|   | **/s/ Brent M. Boyles**          |   |
|   | **Name:**                        |

 

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