U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of
earliest event reported)
June 16, 2005
CASCADE NATURAL
GAS CORPORATION
(Exact
name of registrant as specified in its charter)
Washington
|
|
1-7196
|
|
91-0599090
|
(State
or other jurisdiction
of incorporation)
|
|
(Commission
file number)
|
|
(IRS
Employer
Identification Number)
|
222 Fairview Avenue North, Seattle, Washington 98109
(Address
of principal executive offices)
(206) 624-3900
(Registrants
telephone number, including area code)
Not Applicable
(Former
name or former address, if changed since last report)
Check the appropriate box
below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions (see General Instruction A.2 below):
o Written communications
pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material
pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR 240.14d-2(b))
o Pre-commencement
communications pursuant to Rule 13e-4(c) under Exchange Act (17 CFR
240.13e-4(c))
Item 1.01 Entry Into a
Material Definitive Agreement.
Employment Agreement with Rick Davis as
Chief Financial Officer
On June 16, 2005, Cascade Natural Gas Corporation (the
Company) entered into an Employment Agreement with Rick Davis, pursuant to
which Mr. Davis will become employed as the Companys Chief Financial
Officer (CFO).
Under the terms of the Employment Agreement, Mr. Davis
will receive an annual base salary of not less than $240,000. Mr. Davis initial base salary will be
$240,000, and will be reviewed at least annually by the Companys Governance,
Nominating and Compensation Committee. Mr. Davis
other benefits under the Employment Agreement will include the following:
5,000 shares of the Companys common stock will be awarded to him under
the Companys 1998 Stock Incentive Plan, which will vest one year after his
date of first employment.
Annual cash incentive compensation under the Companys Key Performance
Plan and Term Incentive Plan ranging from 0% to 98% of Mr. Davis base
salary.
Long-term incentive award no less favorable than that provided to other
senior executive officers of the Company under the Companys Long-Term
Incentive Plan. Mr. Davis
anticipated target award is 20% of his base salary.
Supplemental retirement benefits which will provide for contributions
to an account for the benefit of Mr. Davis to provide him with replacement
pay at retirement equal to approximately 55% of his average base salary during
the three consecutive fiscal years of the Company during which his base salary
was highest, after taking into account benefits under any retirement benefits
payable to him under any qualified or nonqualified retirement plan sponsored by
the Company or his prior employer and social security.
A monthly allowance of $400 to provide for the lease or purchase of a
car and the payment of club dues and other such expenses. The Company also will make a one-time payment
of $3,000 to pay the initiation fee for Mr. Davis to join an athletic
club, dining club or country club.
The Employment Agreement, and Mr. Davis employment,
will terminate upon Mr. Davis death and may be terminated by the Company
in the event of Mr. Davis disability.
In addition, the Company may terminate Mr. Davis employment at any
time for Cause (as defined in the Employment Agreement) or for any other reason
upon thirty days prior written notice. Mr. Davis
may terminate the Employment Agreement at any time and for any reason upon
thirty days prior written notice. In the
event that the employment of Mr. Davis is terminated, the Employment
Agreement provides that he (or his estate, as the case may be) will be entitled
to the following, as more fully described in the Employment Agreement:
In the event that the employment of Mr. Davis is terminated upon
his death or by the Company due to his disability: (i) his accrued but
unpaid base salary and vacation through his termination date; (ii) any
unpaid annual incentive compensation earned but not paid in the previous year; (iii) any
amounts otherwise payable to Mr. Davis under the Companys benefit plans
and programs; and (iv) an amount in lieu of any annual incentive
compensation for the current year.
In the event Mr. Davis terminates his employment other than for Good
Reason (as defined in the Employment Agreement): the amounts payable due to
death or disability under (i) through (iii) above. In addition, any shares in the Company that
have not vested will be forfeited.
In the event that the employment of Mr. Davis is terminated by the
Company without Cause, or Mr. Davis terminates his employment for Good
Reason or within one year following a Change of Control (as defined in the
Employment Agreement), Mr. Davis will not be entitled to benefits under
the Companys severance plan but will be entitled to the following: (A) the
amounts payable due to death or disability under (i) through (iii) above;
(B) a separation payment in the amount of 0.50 times Mr. Davis
annualized base salary plus the average of the annual incentive compensation
paid in the two fiscal years prior to the year in which his termination occurs;
and (C) a non-compete payment in the amount of 0.50 times Mr. Davis annualized base
salary plus the average of the annual incentive compensation paid in the two
fiscal years
2
prior to the year in which
his termination occurs. Mr. Davis
and his immediate family also will be entitled to medical benefits
substantially similar to those provided to the Companys senior executive
officers for a period of 12 months after Mr. Davis termination. Upon approval of the Governance, Nominating
and Compensation Committee, any unvested stock options held by Mr. Davis
will be deemed fully vested and exercisable for a period of one year after his
termination.
In the event that the employment of Mr. Davis is terminated by the
Company for Cause, he will be entitled to receive his accrued but unpaid base
salary and any amounts otherwise payable to him under the Companys benefit
plans and programs.
As a condition of his employment, Mr. Davis has agreed
not to compete with the Company or solicit customers or employees of the
Company for a period of two years following termination of his employment with
the Company. These non-compete and
non-solicitation agreements, however, may not be enforceable in some
jurisdictions or may be enforceable only in part. Under the Employment Agreement, the Company
also has agreed to indemnify and hold harmless Mr. Davis against damages
or other losses resulting from his good faith performance of his duties and
obligations under the Employment Agreement.
This right of indemnification shall be in addition to any rights of
indemnification provided in the Companys Articles of Incorporation and Bylaws
or under applicable law.
The foregoing summary of the Employment Agreement is
qualified in its entirety by reference to the text of the Employment Agreement
which is attached as Exhibit 10.1 to this Current Report on Form 8-K. A copy of the press release issued by the
Company on June 16, 2005 announcing the hiring of Mr. Davis is
attached as Exhibit 99.1 to this Current Report on Form 8-K.
Retirement Agreement with J.D. Wessling
On January 10, 2005, the Company entered into an
Agreement and General Release with J.D. Wessling, the Companys Chief Financial
Officer (CFO), in connection with Mr. Wesslings retirement as CFO. The agreement stated that Mr. Wesslings
last day of employment would be June 15, 2005. In order to support a smooth transition to a
new CFO, Mr. Wessling has agreed to continue as CFO until June 27,
2005, when Mr. Davis will begin employment as the CFO. Mr. Wessling will remain an employee of
the Company and has agreed to be available for consultation through July 21,
2005. Mr. Wessling will continue to
receive his base pay at the current rate through July 21, 2005. An amendment to Mr. Wesslings
retirement agreement is attached as Exhibit 10.2 to this Current Report on Form
8-K.
Item 5.02 Departure of
Directors or Principal Officers; Election of Directors; Appointment of
Principal Officers.
As described under Item
1.01 above, Mr. Wessling will resign as the Chief Financial Officer (CFO),
effective June 27, 2005, and Mr. Davis will commence as the Companys
new CFO, effective June 27, 2005.
Summaries of the amendment to Mr. Wesslings retirement agreement
and Mr. Davis employment agreement are set forth in Item 1.01 above,
which description is incorporated by reference into this Item 5.02.
For eighteen years, until 2002, Davis held various high-level finance
positions with the Weyerhaeuser Company as Director Finance in its Corporate
Office, Director Finance and Controller of its Pulp division, and Vice
President Finance at its Westwood Shipping Lines subsidiary. Earlier in Daviss career, he led corporate
accounting for Croton Corporation (now Esterline) and was an auditor with
Deloitte & Touche in Seattle.
Most recently, Davis, 52, has provided strategic planning and
compliance consulting services through his own firm and with Jefferson Wells, a
global provider of accounting and finance-related services. Davis also served as CFO for PAC Worldwide,
a manufacturer and distributor of packaging supplies to the air courier industry.
There are no family
relationships between Mr. Davis and any of the Companys officers or
directors.
A copy of the press
release issued by the Company on June 16, 2005 announcing the hiring of Mr. Davis
is attached as Exhibit 99.1 to this Current Report on Form 8-K.
3
Item
9.01 Financial
Statements and Exhibits.
(c) Exhibits
|
Exhibit No.
|
|
Description of Exhibit
|
|
|
|
|
|
10.1
|
|
Employment
Agreement, dated June 16, 2005, between the Company and Rick Davis.
|
|
|
|
|
|
10.2
|
|
Amendment dated
June 17, 2005 to Retirement Agreement and General Release between the
Company and J.D. Wessling.
|
|
|
|
|
|
99.1
|
|
Press Release
dated June 16, 2005.
|
SIGNATURE
Pursuant to the
requirements of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned hereunto duly
authorized.
|
CASCADE
NATURAL GAS CORPORATION
|
|
|
|
|
Dated:
June 18, 2005
|
By:
|
/s/ Larry C.
Rosok
|
|
|
Larry C. Rosok
|
|
|
Corporate
Secretary
|
|
|
4
EXHIBIT INDEX
|
Exhibit No.
|
|
Description of Exhibit
|
|
|
|
|
|
10.1
|
|
Employment
Agreement, dated June 16, 2005, between the Company and Rick Davis.
|
|
|
|
|
|
10.2
|
|
Amendment, dated
June 17, 2005, to the Retirement Agreement and General Release between the
Company and J.D. Wessling.
|
|
|
|
|
|
99.1
|
|
Press
Release dated June 16, 2005.
|
5