EMPLOYMENT AGREEMENT
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THIS AGREEMENT, made this 28th day of February, 2000 by and between
ENERGY CORPORATION OF AMERICA, whose address is 4643 S. Ulster Street, Suite
1100, Denver, Colorado (hereinafter "ECA") and Michael S. Fletcher, of 411
Country Cove Estates, Scott Depot, West Virginia (hereinafter "Employee").
WHEREAS, Employee is currently President of Mountaineer Gas Company;
And
WHEREAS, Employee has been a valued employee of Mountaineer Gas
Company and ECA desires to employ Employee upon the terms and conditions
specified below.
NOW, THEREFORE, in consideration of the mutual promises hereinafter
contained, the parties agree as follows:
1. EMPLOYMENT.
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(a) INITIAL TERM. ECA shall employ Employee and Employee
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accepts such employment upon the terms and conditions set forth in this
Agreement for an initial term of three (3) years, commencing on the date of the
closing of the sale of the stock of Mountaineer Gas Company to Allegheny Energy,
Inc. ("Allegheny").
(b) RENEWAL. This Agreement shall be automatically renewed for
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one (1) additional year each year after the expiration of the Initial Term as
described in Paragraph 1(a) above, unless Employee or ECA gives written notice
to the other at least sixty (60) calendar days prior to the expiration of the
Initial Term or any renewal period of its desire to terminate the Agreement. If
such notice of termination is given by either party, the Agreement will
terminate by its own terms as set forth in this Agreement, and ECA shall have no
further obligation to pay Employee any compensation or any other amounts, except
for Earned Incentive Compensation, as defined in this Agreement, or as otherwise
required by law.
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2. DUTIES. During the period the Management Agreement between ECA
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and Allegheny remains in effect, Employee's duties shall be substantially the
same as the Employee previously performed for Mountaineer Gas Company. If the
services to be performed by Employee for Allegheny under the Management
Agreement do not require Employee's full time and attention, then ECA shall have
the right to assign additional duties and functions to Employee. In the event
the Management Agreement is terminated during the term of this Employment
Agreement, ECA shall have the right to assign other duties and functions to the
Employee. ECA shall use its best efforts to assign to Employee duties and
functions which are similar to Employee's prior job responsibilities; however,
if no similar positions are available at ECA, Employee agrees to undertake other
responsibilities and projects for ECA.
3. COMPENSATION. ECA shall pay to Employee the following
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compensation:
(a) SALARY. During the term of this Agreement Employee shall be
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paid an annual salary of $229,771.00, payable in semi-monthly installments.
Employee's salary shall be reviewed annually and shall be adjusted upward, if
appropriate, based on Employee's performance.
(b) BENEFITS. ECA shall provide Employee with health insurance,
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dental insurance, life insurance, and disability insurance. Employee shall be
eligible to participate in ECA's 401k Plan and ECA shall make contributions to
the Plan on behalf of Employee in the percentage amount governed by the Plan,
which currently provides for a contribution by ECA in the amount equal to 33% of
Employee's contributions to the plan. Employee shall also be eligible to
participate in all other health, educational, insurance, profit-sharing and
wellness programs offered by ECA to its employees.
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(c) REIMBURSEMENT OF EXPENSES. ECA shall reimburse Employee for
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all reasonable business-related expenses incurred by Employee in connection with
his employment at ECA, in accordance with the policies, practices and procedures
in effect generally with respect to ECA employees.
(d) LOAN. In consideration of Employee's commitment to ECA and
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fulfillment of his duties and obligations hereunder, subject to the provisions
of Paragraph 4(c) below, ECA shall make a loan to Employee in the amount of
$229,771.00. ECA shall make the loan to Employee at the commencement of the
term of this Agreement. Employee shall execute a Promissory Note, substantially
in the form of Exhibit A attached hereto. If Employee remains employed at ECA
for the Initial Term of this Agreement, then, at the expiration of the Initial
Term, ECA shall cancel all sums due ECA from Employee under the Promissory Note.
(e) EARNED INCENTIVE COMPENSATION. At the expiration of the
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Initial Term of this Agreement, Employee shall receive 2,370 shares of Class A
stock in ECA.
4. TERMINATION OF EMPLOYMENT.
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(a) BY DEATH OR DISABILITY. Employee's employment with ECA
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shall terminate automatically upon Employee's death. ECA may terminate
Employee's employment during any period in which Employee is prevented, after
reasonable accommodation by ECA, from properly performing his duties due to a
mental or physical illness for a period of three months in the aggregate in any
twelve month period.
(b) FOR CAUSE. Notwithstanding any other provision contained in
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this Agreement, ECA may terminate this Agreement immediately, at any time, for
cause. For purposes of this Agreement "for cause" shall be deemed to include:
(1) any willful breach or habitual neglect of the Employee's duties that he is
required to perform under the terms of this Agreement; (2) commission of any
material act of dishonesty, fraud, misrepresentation, or other act of moral
turpitude; (3) gross carelessness or misconduct; (4) violation of any fiduciary
duty owed to ECA; and (5) conviction of a felony.
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5. OBLIGATIONS OF EMPLOYEE ON TERMINATION.
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(a) Employee acknowledges and agrees that all property,
including keys, credit cards, books, manuals, records, reports, notes,
contracts, confidential information, copies of any of the foregoing, and any
equipment furnished to Employee by ECA belong to ECA and shall be promptly
returned to ECA upon termination of employment.
(b) Upon termination of employment, Employee shall be deemed to
have resigned from all offices and directorships held at ECA.
(c) REPAYMENT OF LOAN. If Employee resigns or otherwise
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voluntarily terminates his employment from ECA prior to the expiration of the
Initial Term of this Agreement, or if ECA terminates Employee's employment for
cause as defined in Paragraph 4(b) above prior to the expiration of the Initial
Term of this Agreement, then all amounts outstanding under the loan made to
Employee pursuant to Paragraph 3(d) above shall become due and payable and
Employee shall repay such loan to ECA within ten (10) days of the termination of
his employment.
6. OBLIGATIONS OF ECA ON TERMINATION.
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(a) DEATH, DISABILITY, OR FOR CAUSE. If Employee's employment
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is terminated by reason of Employee's death or disability, or if Employee's
employment is terminated by ECA for cause as provided in this Agreement, this
Agreement shall terminate as provided by its terms and ECA's obligations to
Employee under this Agreement shall be limited to (i) the prorated payment of
Employee's salary through the date of termination to the extent not paid by
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then; (ii) the payment of any unused earned vacation through the date of
termination; and (iii) the payment of any reimbursable business expenses that
were documented by Employee prior to termination in accordance with ECA's
policies and that were not reimbursed by ECA at the time of the termination of
this Agreement. As of the date of termination of this Agreement, ECA's
obligations to Employee under this Agreement shall terminate, and ECA will have
no further obligation to pay Employee or his estate, beneficiaries or legal
representatives any compensation or any other amounts, except as otherwise
provided by law. If Employee's employment is terminated by reason of Employee's
death or disability, then ECA shall cancel all sums due ECA from Employee under
the Promissory Note.
(b) FOR REASONS OTHER THAN DEATH, DISABILITY, OR FOR CAUSE. If
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Employee's employment is terminated by ECA for reasons other than death,
disability or for cause, ECA's obligations to Employee shall be limited to (i)
the payment of Employee's salary and the continuation of Employee's benefits for
the period from the date of termination until the end of the Initial Term; (ii)
the cancellation of all sums due and owing ECA under the Promissory Note; and
(iii) the issuance of the shares of Class A stock described in Paragraph 3(e)
above.
7. ARBITRATION.
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(a) All claims, disputes, controversies or disagreements of any
kind whatsoever ("Claims") including any claims arising out of or in connection
with Employee's employment or the termination of Employee's employment, that may
arise between Employee and ECA, including any claims that may arise between
Employee and ECA's officers, directors, employees, or agents in their capacity
as such, shall be submitted to arbitration before the American Arbitration
Association in Charleston, West Virginia in accordance with the rules and
procedures of the American Arbitration Association then existing.
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(b) The fees and costs of the arbitration shall be borne equally
by the Employee and ECA, except that Employee and ECA shall each pay for their
own attorneys' fees or costs of representation for purposes of the arbitration,
unless otherwise provided by law.
8. ASSIGNMENT. This Agreement is personal to Employee and shall
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not be assigned by Employee. Any such assignment shall be null and void. ECA
shall have the right to assign its obligations hereunder to any affiliate or
subsidiary of ECA.
9. SUCCESSORS. This Agreement shall inure to the benefit and be
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binding upon ECA and its subsidiaries, successors and assigns and any person
acquiring, whether by merger, consolidation, or the purchase of all or
substantially all of ECA's assets. The rights of Employee to receive payment of
compensation provided for in this Agreement shall inure to the benefit, and may
be enforced by, Employee's estate in the event of his death.
10. WAIVER. No delay or omission by ECA or Employee in exercising
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any right under this Agreement shall operate as a waiver of that or any other
right. No waiver of any provision of this Agreement, or consent to any
departure by either party from any provision of this Agreement shall be
effective in any event unless it is in writing, designated a waiver, and signed
by the party waiving the breach. Such waiver shall be effective only in the
specific instance and for the purpose for which it is given.
11. SEVERABILITY. The provisions of this Agreement are divisible;
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if any provision shall be deemed invalid or unenforceable, that provision shall
be deemed limited to the extent necessary to render it valid and enforceable and
the remaining provisions of this Agreement shall continue in full force and
effect without being impaired or invalidated in any way.
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12. AMENDMENT. This Agreement may not be altered or amended,
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except in a writing signed by both Employee and ECA.
13. CONSTRUCTION AND GOVERNING LAW. The captions used in
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connection with this Agreement are for reference purposes only and shall not be
construed as part of this Agreement. This Agreement shall be governed by and
construed in accordance with the laws of the State of West Virginia.
14. ENTIRE AGREEMENT. This Agreement supersedes all prior
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agreements, understandings, and communications between Employee and ECA, whether
written or oral, express or implied, relating to the subject matter of this
Agreement and is intended as a complete and final expression of the terms of the
Agreement between Employee and ECA and shall not be changed or subject to change
orally.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date and year first above written.
ENERGY CORPORATION OF AMERICA
By /S/ John Mork
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John Mork, President and CEO
/S/ Michael S. Fletcher
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Michael S. Fletcher
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EXHIBIT A
PROMISSORY NOTE
$229,771.00 Charleston, WV
, 2000
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FOR VALUE RECEIVED, THE UNDERSIGNED, Michael S. Fletcher ("Borrower"),
hereby promises to pay to the order of Energy Corporation of America ("Lender"),
at its offices located at 4643 South Ulster Street, Suite 1100, Denver,
Colorado, 80237, or at such other place as the holder may from time to time
designate, the principal sum of $229,771.00, in lawful money of the United
States, and to pay interest thereon in like money at said office from January
11, 2000 on the unpaid principal balance hereof at the rate of eight percent
(8%) per annum.
The principal amount due hereunder together with interest thereon
shall be paid three (3) years from the date of this Note; provided, however,
that such repayment obligations shall be cancelled (i) if Borrower remains in
the continuous employment, in good standing, of Energy Corporation of America
for a period of three (3) years from the date of this Note; or (ii) Energy
Corporation of America terminates Borrower's employment at any time prior to
three (3) years from the date of this Note, for any reason other than cause; or
(iii) the Borrower's death or disability.
Borrower waives diligence, demand, presentment, notice of nonpayment
and protest, and assent to extensions of the time of payment, forbearance, or
other indulgence, without notice.
IN WITNESS WHEREOF, Borrower has caused this Note to be executed as of
the date and year first above written.
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MICHAEL S. FLETCHER
