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5.3 ERMUSR 09-08-2020UTILITIES COMMISSION MEETING TO:FROM: ERMU Commission ERMU GM Search Committee MEETING DATE: AGENDA ITEM NUMBER: September 8, 20205.3 SUBJECT: Leadership Transition – Search Committee Update ACTION REQUESTED: Approve the General Manager Employment Agreement, effective August 11, 2020. BACKGROUND/DISCUSSION: At the August 11 commission meeting, the Search Committee recommended Theresa Slominski, Interim General Manager, tothe positionof General Manager. The Commission adopted this recommendation and approved hiring Theresa as the General Manager, effective August 11, 2020. An employment agreement was presented to Theresa for review and has been approved by her. The agreement is presented here for the Commission to review and approve, effective August 11, 2020. ATTACHMENTS: ERMU General Manager Employment Agreement ______________________________________________________________________________ Page 1 of 1 66 EMPLOYMENT AGREEMENT Agreementas of August 11, 2020 (Effective Date Utilitiesand Theresa Slominski, a resident ofMinnesota Employee RECITALS A.The Utilities desires to employ Employee in accordance with the terms of this Agreement. B.The Utilities and Employee desire to enter into this Agreement. AGREEMENT In consideration of the aboverecitals and the promises set forth in this Agreement, the Utilities and Employee agree as follows: 1.Nature and Capacity of Employment. The Utilities hereby agrees to employ Employee pursuant to the terms of this Agreement. As of the Effective Date, Empl title will be General Manager. Employee agrees to perform, or be available to perform, on a full-time basis, the functions of this position and such other duties as assigned by the policies and practices except as otherwise explicitly provided in this Agreement; and to the continuing discretion of the Utilities Commission. 2.At-Will Employment as of August 11, 2020and continue untilterminated by either party as provided for in at will and may be terminated by either the Employee or the Utilities for any reason at any time, with or without advance notice, subject to the provisions of Section 6, below. Under certain circumstances Employee may be eligible for severance benefits pursuant to Section 6. 3.Compensation. 3.1.Base Salary salary will be $160,000.00,which will be earned by Employee on a pro rata basis as Employee performs services for the Utilities and which salary will be paid in accordance and change by the Utilities in its sole discretion from time to time. compensation shall be subject to federal and state income tax withholding, FICA and Medicare and suchother deductions as the Utilities is required by law, or believes in good faith it is required by law, to make. The position of General Manager is an exempt Page 1of15 67 executive position under the Fair Labor Standards Act (FLSA) and the Minnesota Fair Labor Standards Act (MFLSA) and, in accordance with those laws, shall not be subject to the payment of premium compensation, or to receiving compensatory time, for overtime. 3.2.Performance Measurement Incentive Compensation. Employee will be eligible to fully participa -based compensation earned by eligible employees (those currently employed who are in good standing) in accordance with the terms and conditions and incentive achievement formulae adopted annually by the Utilities Commission and set forth in a UPMIC document. To be eligible to receive an award under UPMIC if one is achieved, the Employee must remain employed by the Utilities at the time such award is to be made. 4.Employee Benefits will be entitled to participate in all retirement savings plans, health or other insurance plans, and other employee benefits and policies made available by the Utilities to its employees generally,as they may be changed from time to time.Such retirement plans include, specifically, the Public Employees Retirement Association (PERA). The Utilities shall make contributions to a retirement plan account established for Employee in PERA as prescribed by law and in accordance with the terms and conditions of such PERA retirement plan. Other such benefits and policies include paid sick leave and paid holidays; but Employee will receive paid Vacation pursuant to this Agreement as set forth below notwithstanding the paid vacation benefit otherwise provided for Utilities employees generally. Employee acknowledges and agrees that the Utilities is under no obligation to Employee to establish and maintain any employee benefit plan in which Employee may participate, and that the terms and provisions of any employee benefit plan of the Utilities are matters within the exclusive province of the employment, Employee will be entitled to continue those benefits as to which continuation is required by state or federal law. Vacation and Holidays. The Utilities agrees that Employee will be entitled topaid time vacation timeof up tofive weeks per year without reduction of the minimum annual base salary payable to Employee pursuant to Section 3.1 of this Agreement. All terms and conditions for paid vacation other than the amount available annually (which is as set forth in this paragraph) including terms for annual carryover of vacation time and for pay out of such time upon the end of employment will be as otherwise applicable to all Utilities employees. Professional and Civic Dues, Fees, and Expenses.The Utilities shall pay for attendance at professional and civic organizations and events and conferences reasonably require that the Utilities Commission approve such dues, fees, and expenses in advance of their being incurred. Page 2of15 68 5.Confidential Information. 5.1.Definition of Confidential Information. For purposes hereof, Confidential Information-public information regarding the Utilities or any affiliated entity, including but not limited to the City of Elk River (each, an Affiliateany of their employees, directors, representatives, suppliers, vendors, shareholders, members, customers, or other third parties or entities with whom the Utilities application for and/or employment with the Utilities, whether developed by Employee or by others and in whatever form, and includes, but is not limited to, trade secrets, Inventions (as defined below), financial information, key personnel information, and information relating to such matters as existing or contemplated products, services, research and/or development, insurance arrangements, profit margins, fee schedules, pricing, design, processes, formulae, business plans, sales techniques, marketing techniques, training methods, manuals and materials, policies or practices related to business, or other matters, computer databases, computer programs, software and other technology, customer lists, customer preferences or requirements, vendor lists, or supply information. Any information disclosed to the Employee or to which the Employee has access during the reasonably considers to be Confidential Information, or which the Utilities or any Affiliate treats as Confidential Information, will be presumed Confidential Information. 5.2.Restrictions. Employee agrees not to, directly or indirectly, use or disclose any Confidential Information for the benefit of anyone other than the Utilities either during Utilities ends, regardless of the reason for such separation of employment. Employee recognizes that the Confidential Information constitutes a valuable asset of the Utilities and hereby agrees to act in such a manner as to prevent its disclosure and use by any person under this paragraph are unconditional and will not be excused by any conduct on the part of the Utilities, except prior voluntary disclosure by the Utilities of the information, other than by Employee. 5.3.Compelled Disclosure.In the event a third party seeks to compel disclosure of Confidential Information by Employee by judicial or administrative process, Employee will promptly notify the Utilities Commission Chairof such occurrence and furnish a copy of the demand, summons, subpoena, or other process served upon Employee to compel such disclosure and will permit the Utilities to assume, at its expense, but with refuses to contest such third party disclosure demandunder judicial or administrative process, or if a final judicial order is issued compelling disclosure of Confidential Information by Employee, Employee will be entitled to disclose such information in compliance with the terms of such administrative or judicial process or order without Page 3of15 69 5.4.Immunity for Certain Limited Disclosures. Notwithstanding any other provision of this Agreement, Employee may in accordance with any applicable law, including but not limited to the federal Defend Trade Secrets Act, disclose Utilities information, including trade secrets (a) in confidence, to federal, state, or local government officials, or to an attorney of Employee, for the sole purpose of reporting or investigating a suspected violation of law; or (b) in a document filed in a lawsuit or other legal proceeding, but only if the filing is made under seal and protected from public disclosure. Nothing in this Agreement is intended to conflict with any applicable law or create liability for disclosures expressly allowed by law. 5.5.Return of Confidential Information and Other Property. When separation of employment, Employee will promptly turnover to Utilities in good condition but not limited to, all originals, copies of or electronically stored documents or other materials containing Confidential Information, regardless of who prepared them. In the electronic systems, Employee will promptly make a hard copy of such information in paper, audio recording, disc format, or other format as appropriate, turn that hard copy over Employee agrees to execute written confirmation that all Confidential Information in the n, or to which the Employee has access, has been turned over to Utilities or destroyed. 6.Termination of Employment Agreement terminated at will subject to the provisions of this Section 6. 6.1.With Cause. For purposes of this Cause occurrence of any of the following, as determined by the Utilities Commission in its sole discretion: (a) duties,provided that such Cause is not cured by Employee, or is not capable of being cured by Employee, within 30 days after the Utilities delivers written notice of such Cause to Employee; or (b)Conduct in violation of or inconsistent with Utilities policy, including but not limited to any and all policies set forth in this Handbook; conduct or language that is improper or inappropriate in the discretion of the Utilities; insubordination; failure to do the work assigned in a manner satisfactory to the Utilities; dishonesty or stealing; the sale, transfer of, or possession, or being under the influence, of Page 4of15 70 intoxicating beverages or controlled or mood altering substances while on the job; or (c)Conduct by Employee which is (or will be if continued) injurious to the Utilities, monetarily or otherwise; or (d)Fraud, misappropriation, or embezzlement by the Employee; or (e) misdemeanor,or a crime of moral turpitude; or (f) The Utilities, acting by and through the Utilities Commission may immediately terminate employment by the Utilities, the Utilities will be relieved of all obligations and liabilities to Employee under this Agreement. 6.2.Without Cause/With Good Reason. under this Agreement is terminated by the Utilities without Cause or by the Employee wiGoodReasonEmployee will be eligible for separation pay as set forth in Section 6.6 below. Further, in the event of termination by the Utilities without Cause or by the Employee without Good Reason, Employee, if requested by the Utilities, will continue to render services to the Utilities up to the date of actual termination. Even if the Utilities does not request Employee to compensation, plusany,bonuses, expenses, or allowances accrued up to the date of actual termination. 6.3.Death. Should Employee die during the term of this Agreement, this te the compensation which would otherwise be payable to Employee death. 6.4.Disability under this Agreement due to disability, after being provided with any reasonable accommodation the Utilities may be obligated by law to provide, this Agreement and 6.5.By Employee for Good ReasonGood Reasonof the following events without the to resign for Good Reason within 90 days of his/her discovery of such event: Page 5of15 71 (a)s; (b)a failure by the Utilities to provide Employee any material payments or benefits owed to Employee; (c) benefits; or (d) (50) miles away from specific reason for such resignation and provided that such reason has not been cured by the Utilities within said notice period. 6.6.Severance Pay Upon Termination Without CauseorFor Good Reason. On the condition that Employee signs and does not rescind an agreement releasing claims arising out of his/her employment, in a form prescribed by the Utilities, in the event that by the Utilities without Cause or by Employee for Good Reason, the Utilities shall, subject to all conditionsset forth in this Section 6, provide (a)Employee shall be paid out for the amount of earned but unused vacation time in his/her vacation account as of the date of separation, provided they sign and do not rescind an agreement releasing claims arising out of their employment, in a form prescribed by the Utilities, less the amount of any debt then owed by Employee to the Utilities whether or not such debt is then due or payable. (b)Alternatively,ifEmployee retires immediately eligible to claim his/her pension and gives the Utilities at least 60 days notice shall have 100% of unused vacation time converted into cash and deposited into their Post Employment Health Care Savings account. (c)Sick leave shall be subject to limited conversion under the Health Care Savings Plan policy found in the Employee Handbook. Pursuant to such policy, Employee will have 50% of unused sick leave, up to a maximum of 120 days, converted into cash and deposited into his/her Post Employment Health Care Savings account. The form to be provided Employee for release of claims as stated above include adequate Page 6of15 72 claims against th affiliated entities and persons; (iv) confidentiality of separation terms;and (v) ackn obligations under Sections 7, 8, and 9 of this Agreement. Any Severance Benefits due to Employee under this Section will, at the election of the Utilities, be provided to Employee within two and one-half months following the end of the second taxable year following to qualify for an exemption under Section 409A of the Internal Revenue Code of 1986, as amended, and regulations issued thereunder. 7.Inventions. 7.1.DefinitionInventionsmean all concepts (including business opportunities), discoveries, improvements, products, inventions, and works of authorship (including literary, pictorial, sculptural, graphic, audio or visual works), whether published or unpublished, whether patentable or unpatentable, in whatever form, that are made, conceived, generated, or first reduced to writing, drawing, or practice solely by the Employee or jointly by the Employee with others, during or after working ilities and for a period of one (1) year after separation of employment, and relating to, or arising out of any developments or products of, or pertaining to the business of the Utilities, its divisions or its subsidiaries (companies in which the Utilities owns more than 10% of the voting equity). 7.2.Obligation to Disclose and Assign. Employee agrees to promptly disclose to the Utilities or its designee any and all Inventions that relate to the business of the Utilities and such Inventions will be the absolute property of the Utilities. Upon request compensation to the Employee, the Employeeagrees to execute all the instruments deemed necessary by the Utilities or its designee for the filing and prosecution of any applications for Letters Patent and/or copyright registration (or their equivalent in countries other than the United States) on Inventions and agrees to perform any and all acts deemed necessary by the Utilities to aid the Utilities in securing the allowance of such applications or registrations. theEmployee agrees to assign, and Employee hereby does assign to the Utilities, business of the Utilities and in and to all applications for Letters Patent and/or copyright registration (or their equivalent in countries other than the United States) that may be filed upon, and Employee agrees to execute any documents necessary to make such assignments. Page 7of15 73 Notwithstanding the foregoing, Employee understands that this assignment of inventions does not apply to any work of authorship for which no equipment, supplies, facility, or trade-secret information of the Utilities was used and which was developed rectly to the business development; or (b) which does not result from any work performed by Employee for the Utilities. 7.3.Pre-existing Inventions. Employee has identified on Exhibit Aattached hereto a complete list of all inventions or improvements which have been made or conceived or first reduced to practice by Employee alone or jointly with others prior to s and which Employee desires to exclude from the operation of this Agreement. If there is no such list on Exhibit A, Employee represents that Employee has made no such inventions or improvements at the time of signing of this Agreement. 8.Non-Competition. 8.1.Acknowledgement to be performed for Utilities are of a special and unique nature; (b) the Utilities operates in a highly competitive environment and would be substantially harmed if Employee were to compete with Utilities or divulge its confidential information; (c) Employee has received valuable and sufficient consideration for entering into this Agreement, including but not nd the Confidential Information; and (d) the provisions of this Section 9, including all of its . 8.2.Covenant Not to Compete. Employee agrees that during employment with the Utilities and for an additional period of 12 months following the end Noncompete Period Employee will not,within any geographic area in which the Utilities is engaged in developing, manufacturing, marketing, distributing, or selling its products and services, directly or indirectly, hold any ownership interest in (except a stockholder of a public company in which Employee owns less than five percent (5%) of the issued and outstanding capital stock of such company), manage, control, serve on the Board of Directors of, or render services of any kind in any capacity to any person or entity engaged in the development, manufacture, marketing, distribution, or sale of any services or products of the same general type, which perform similar functions, or which are used for three years of employment with the Utilities being developed, manufactured, marketed, distributed, or sold by the Utilities. 8.3.Non-Solicitation of Customers or Vendors or Prospective Customers or Vendors. Employee agrees that, during the Non-Compete Period, Employee will not Page 8of15 74 directly or indirectly (a) canvass, solicit, or accept business concerning any service or product that competes with a service or product of the Utilities from any person or entity s of employment with the Utilities a customer or vendor or a prospective customer or vendor of the Utilities with whom Employee had contact while an Employee of the Utilities or about whom Employee has Confidential Information; or (b) otherwise take any action to divert business from or curtail the business of the Utilities. 8.4.Non-Solicitation of Employees or Business Relations. Employee agrees that, during the Non-Compete Period, Employee will not, directly or indirectly, take any action to solicit, recruit, encourage, or assist any employee or any supplier, vendor, consultant, independent contractor, subcontractor, or any other business relation (each a Business Relation relationship wi forth in this Section 8.4 will apply regardless of whether Employee initiates contact with a Utilities employee or Business Relation or the Utilities employee or Business Relation initiates contact with the Employee. 8.5.Disclosure of Obligations. During the Non-Compete Period, Employee will, prior to accepting employment or any other business relationship with any other ations under this Agreement. 8.6.Extension of Non-Compete Period. If the Utilities obtains a court ruling or judgment finding that Employee has violated any portion of Section 8, Employee agrees that the Non-Compete Period will be extended for a period of time equal to the period of time during which Employee was found to be in breach of this Section 8. 9.Use of Name and Photograph. Employee consents to the present or future use facilities brochure or other advertising or publications of the Utilities. Employee further consents is public as to other Utilities employees and Employee waives any rights to prevent Utilities employees from obtaining this information. Employee promises to hold the Utilities harmless for allowing its employees to access this information and promises to hold the Utilities harmless for all non-willful disclosures to anyone who is not a Utilities employee. Employee agrees to sign the Utilitiesstandard Consent to Release of Private data form in partial satisfaction of the requirements of this Section 9. 10.Employee Representations and Warranties. Employee represents and warrants under this Agreement does not and will not cause Employee to violate the terms of any agreement, commitment, or understanding Employee has with any other person or entity, including, but not limited to, any invention or intellectual property assignment agreement, any noncompete or nonsolicitation agreement, or any agreement to keep in confidence the Page 9of15 75 trade secrets, proprietary, or other confidential information of such person or entity. Employee also represents and warrants that Employee has not brought and will not bring to the Utilities, or use for the benefit of the Utilities, any materials, information, and/or documents of any person or entity that are not generally available to the public or within person or entity permitting Employee to retain and use said materials, information, and/or documents. Employee hereby further re rights of any other person orentity. Employee further agrees to indemnify and hold harmless the Utilities against any expenses, damages, costs, losses, or fees (including legal fees) incurred by Utilities in any suit, claim, or proceeding brought by any third party based on a fact which constitutes a breach of the warranty set forth in this Section 11. 11.Section 409A of the Internal Revenue Code. This Agreement is intended to comply with Section 409A of the Internal Revenue Code or an exemption thereunder and will be construed and administered in accordance with Section 409A. Notwithstanding any other provision of this Agreement, payments provided under this Agreement may only be made upon an event and in a manner that complies with Section 409A or an applicable exemption. Any payments under this Agreement that may be excluded from Section 409A either as separation pay due to an involuntary separation from service or as a short-term deferral will be excluded from Section 409A to the maximum extent possible. For purposes of Section 409A, each installment payment provided under this Agreement will be treated as a separate payment. Any payments to be made under this Agreement upon a termination Notwithstanding the foregoing, the Utilities makes no representations that the payments and benefits provided under this Agreement comply with Section 409A and in no event will the Utilities be liable for all or any portion of any taxes, penalties, interest, or other expenses that may be incurred by the Executive on account of non-compliance with Section 409A. Notwithstanding any other provision of this Agreement, if any payment or benefit provided s determined to 409A(a)(2)(b)(i), then such payment or benefit will not be paid until the firstpayroll date to occur following the six- Specified Employee Payment Date otherwise have been paid before the Specified Employee Payment Date will be paid to Employee in a lump sum on the Specified Employee Payment Date and thereafter any remaining payments will be paid without delay in accordance with their original schedule. 12.Miscellaneous. Page 10of15 76 12.1.Governing Law. This Agreement and all matters arising out of or relating to this Agreementwill be governed by, construed, and enforced in accordance with the laws of the State of Minnesota without giving effect to any choice or conflict of law doctrine that otherwise might be applicable. 12.2.Submission to Jurisdiction. Any legal suit, action, or proceeding arising out of or relating in any way tothis Agreement or the transactions contemplated hereby will be instituted exclusively in the courts of competent jurisdiction located in the State of Minnesota. The parties hereto consent to the exclusive jurisdiction of such courts in any such suit, action, or proceeding, and consent to personal jurisdiction in such courts. 12.3.Notice. All notices, requests, consents, claims, demands, waivers and other communicationsunder this Agreement must be in writing and will be deemed effectively given(a) on the date delivered by hand, sent by facsimile (with evidence of successful transmittal), or sent by e-mail (with evidence of successful transmittal) if delivered/sent during normal business hours of the recipient, and on the next business day if delivered/sent after normal business hours of the recipient; (b) on the second business day after delivery to a nationally recognized overnight courier; or (c) on the third business day after the date mailed by certified or registered mail, postage prepaid. Such communications must be sent to the respective parties at the following address: (a) if to the Utilities, to the address of its then principal office; and (b) if to Employee, to theaddress last shown in the records of the Utilities. 12.4.Entire Agreement. This Agreement, together with all related exhibits and schedules, any other documents incorporated herein by reference, and any and all other documents, instruments, or other agreements executed in connection with this Agreement or otherwise executed in connection with or arising out of the transactions contemplated by this Agreement, constitute the sole and entire agreement and understanding of the parties hereto with respect to the subject matter hereof and thereof, and replace and supersede any and all prior oral and written understandings, agreements, representations, warranties, and discussions with respect to such subject matter. 12.5.Payments. All amounts paid under this Agreement will be subject to normal withholdings or such other treatment as required by law. 12.6.Survival of Sections 5 & 7-10 and noncompete and other obligations set forth at Section 5 and Sections 7 through 10 of this of employment with the Utilities, regardless of the reason for such terminations. 12.7.Counterparts; Electronic Transmission. This Agreement may be executed in counterparts, each of which will be deemed an original copy of this Agreement but all of which together will be deemed to be one and the same agreement. A signed copy of this Agreement delivered by facsimile, e-mail attachment, or other means of electronic Page 11of15 77 transmission will be deemed to have the same legal effect as delivery of an original signed copy of this Agreement. 12.8.Successors and Assigns. This Agreement is personal in nature to the Employee and the Employee will not assign, transfer, or delegateany right, interest,or obligation hereunder in whole or in part, without the prior written consent of the Utilities. The rights, interests, and obligations of the Utilities under this Agreement may, in the ssors and assigns. Any purported assignment in violation of this Section will be null and void.In the event any assignment is made, this Agreement will be binding upon and inure to the benefit of the parties and their respective permitted successors andassigns. 12.9.Cumulative Remedies. The rights and remedies under this Agreement are cumulative and are in addition to and not in substitution for any other rights and remedies available at law or in equity or otherwise. 12.10.Equitable Remedies. Employee acknowledges that a breach or threatened breach of any of its obligations under Section 5 or Sections 7 through 10, would give rise to irreparable harm to the Utilities for which monetary damages would not be an adequate remedy, and hereby agrees that in the event of a breach or a threatened breach by Employee of any such obligations, the Utilities will, in addition to any and all other rights and remedies that may be available to it in respect of such breach, be entitled to equitable relief, including a temporary restraining order, an injunction, specific performance, and any other relief that may be available from a court of competent jurisdiction (without any requirement to post bond). 12.11.Amendment. This Agreement may be amended, modified, or supplemented only byan agreement in writing executed by all of the parties to this Agreement. 12.12.Waiver. No waiver by any party of any of the provisions hereof will be effective unless explicitly set forth in writing and signed by the party so waiving. No waiver by any partywill operate or be construed as a waiver in respect of any failure, breach, or default not expressly identified by such written waiver, whether of a similar or different character, and whether occurring before or after that waiver. No failure to exercise, or delay in exercising, any right, remedy, power or privilege arising from this Agreement will operate or be construed as a waiver thereof; nor will any single or partial exercise of any right, remedy, power, or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power, or privilege. 12.13.Severability; Blue Pencil. If any term or provision of this Agreement is found to be invalid, illegal, or unenforceable underapplicable law, such provision will be ineffective only to the extent of such invalidity, illegality, or unenforceabilitywithout invalidating the remainder of such provision or any other term or provision of this Agreement. To the extent legally permissible, any such illegal, invalid, or unenforceable Page 12of15 78 provision will be replaced by a valid provision that will implement the commercial purpose of the Agreement. 12.14.Headings, Gender, Etc. The headings in this Agreement are for convenience only and will not in any way affect the meaning or interpretation of this Agreement. Except where the context requires otherwise, the use of terminology of any of the masculine, feminine, or neuter genders will include all such genders, and the use of the singular number will include the plural and vice versa. 12.15.Third-Party Beneficiaries. Employee acknowledges and agrees that the Affiliates are third-party beneficiaries of this Agreement and may enforce the provisions of this Agreement that confer benefits on them as if they were each a signatory to this Agreement. \[SIGNATURE PAGE FOLLOWS\] Page 13of15 79 80 Exhibit A PRE-EXISTING INVENTIONS AND IMPROVEMENTS Name/Title of Invention or Improvement*Description of Invention or Improvement * Note:If no Inventions or Improvements are listed above, Employee executing the attached Confidentiality, Non-Solicitation and Invention Agreement represents that none exist. Page 15of15 GP:4821-5682-7845 v4 81