THIRD AMENDMENT
X.X. Xxxxxxxxx, XX
Page 6 of 4
THIRD AMENDMENT TO EMPLOYMENT AGREEMENT
This Third Amendment to Employment Agreement ("Third
Amendment") dated the 18th day of March 1998, is by and between
Midcoast Energy Resources, Inc. (the "Employer" or the "Company")
and X.X. Xxxxxxxxx, XX (the "Employee").
W I T N E S S E T H:
WHEREAS, the Employer and the Employee executed a Third
Amendment to Employment Agreement, dated March 17, 1998, which is
superseded by this Third Amendment to Employment Agreement.
WHEREAS, the Employer and the Employee entered into an
Employment Agreement (the "Agreement"), effective April 17, 1995,
as amended by that certain Amendment to Employment Agreement,
dated December 8, 1995 (the "First Amendment") and as further
amended by that certain Second Amendment to Employment Agreement,
dated April 25, 1997 (the "Second Amendment") (the Agreement,
First Amendment and the Second Amendment shall be herein jointly
referred to as the "Agreement as Amended");
WHEREAS, Employer and Employee agree that it is in both of
their best interests to amend Xxxxxxx 0, Xxxx of Employment,
Section 5(A), Base Salary, Section 5(G), Other Benefits, and
Section 6(D), Termination of Employment, and add Section 5(I),
Automobile Allowance, Section 5(J), Executive Benefits, Section
9, Accelerated Vesting of Stock Options, Section 10, Covenant Not
To Compete, and Section 11, Solicitation of Customers.
NOW, THEREFORE, in consideration of the foregoing, the
Employer and the Employee agree as follows:
1. Xxxxxxx 0, Xxxx of Employment, shall be deleted from the
Agreement as Amended and replaced with the following:
Employee's term of employment shall commence on the
Effective Date of the Agreement and shall terminate on
the sixth (6th) anniversary of such date, unless
earlier terminated in accordance with Section 6,
Termination of Employment.
2. Section 5 (A), Base Salary, shall be deleted from the
Agreement as Amended and replaced with the following:
"A. Base Salary. For all services rendered under
this Agreement as Amended, beginning January 1, 1998,
the Employer agrees to pay the Employee during the
Employment Period an annual minimum salary ("Salary")
in the amount of ONE HUNDRED THIRTY FIVE THOUSAND AND
NO/100 DOLLARS ($135,000.00) per year, payable in equal
semi-monthly installments of FIVE THOUSAND SIX HUNDRED
TWENTY FIVE AND NO/100 DOLLARS ($5,625.00) each, or the
equivalent amount payable on any other periodic basis
consistent with the Employer's payroll procedures (but
no less frequently than monthly). Employer shall make
appropriate deductions from Employee's Salary for
customary withholding taxes and other employment taxes
as required for salaried compensation under Federal,
State or Local laws. The foregoing is Employee's
minimum Salary and may be adjusted upward from time to
time by Employer's Board of Director's Compensation
Committee. Employee's Salary shall be in addition to
any bonuses (in cash or stock), which shall be given
from time to time at the discretion of the President."
3. Section 5(G), Other Benefits, shall be deleted from the
Agreement as Amended and replaced with the following:
G. Other Benefits. Employee shall be entitled to
vacation pay in accordance with Employer's written
corporate policy and to additional paid or unpaid
vacation as approved by the President. Such vacation
shall be on a calendar year basis. Effective January
1, 1998, Employee shall be entitled to four (4) weeks
vacation pay. In addition, Employee shall be entitled
to such holidays and sick leave as well as other
benefits, including fringe benefits, provided other
employees of Employer and other benefits as may be
agreed to by the parties.
4. Section 6(D), Termination of Employment, shall be deleted
from the Agreement as Amended and replace with the
following:
D. This Agreement as Amended may be terminated at
Employee's option upon a Change of Control of Company.
As used herein, "Change of Control" means (i) the sale
of all or substantially all of the assets of Company to
a person (other than a wholly-owned subsidiary of
Company) or related group (as that term is used in
Section 13(d)(3) of the Securities Exchange Act of
1934) of persons (other than a wholly-owned subsidiary
of Company) as an entirety or substantially as an
entirety in one transaction or series of related
transactions, (ii) the first day on which a majority of
the members of the board of directors of Company are
not continuing Directors (i.e., any member of the board
of directors who is a member of the board of directors
on the date hereof or who was nominated for election to
the board of directors with the affirmative vote of 2/3
of the continuing Directors who are members of the
board of directors at the time of such nomination or
elections), (iii) the acquisition by any person or
group (as so defined) or persons (other than a wholly-
owned subsidiary of Company) of more than twenty-five
percent (25%) of the total voting power entitled to
vote generally in the election of the directors,
managers or trustees of Company, (iv) the liquidation
or dissolution of Company, or (v) either Xxx Xxxxxxx or
Employee is not the acting president and/or chief
executive officer of Employer. In the event Employee
elects to terminate his employment under this
provision, Employee shall receive a lump sum payment
equal to fifty percent (50%) of Employee's then current
annual salary upon written notice of such election.
5. The following is added to the Agreement as Amended:
Section 5: Compensation, Subsection I. Automobile
Allowance. Effective January 1, 1998, Employee shall,
in lieu of being furnished with a company automobile,
receive a monthly automobile allowance of FIVE HUNDRED
AND NO/100 DOLLARS ($500.00).
Section 5: Compensation, Subsection J. Executive
Benefits. The Employee shall receive benefits similar
to those provided other employees in similar executive
level positions who from time to time may be employed
by Employer.
Section 9: Accelerated Vesting of Stock Options. All
of the stock options previously or hereinafter granted
to the Employee under any and all agreements with
Employer shall become immediately exercisable and
vested (i) should the Employer discharge Employee, or
(ii) upon termination of this Agreement as Amended, as
long as such vesting is allowable under the Employer's
stock option plan pursuant to which Employee received
such options.
Section 10: Covenant Not To Compete. For a period of
twenty-four (24) months from the date of any
termination of Employee's employment with the Employer,
Employee shall not (i) accept employment with or render
any services to or form an association with any
business directly competitive with the Employer in the
areas where it is doing business, or (ii) employ or
offer to employ, in a professional capacity in any
business directly competitive with the Employer, in the
areas where it is doing business, anyone who is or has
been a director, office, shareholder, or employee of
the Employer. Employee acknowledges that the
restrictions imposed by this agreement are fully
understood and will not preclude Employee from becoming
gainfully employed following a termination of
employment with the Employer.
Section 11: Solicitation of Customers. Unless waived
in writing by Employer, Employee further agrees that he
will not, directly or indirectly, during the course of
employment and for two (2) years thereafter upon
termination of this employment contract either
voluntarily or involuntarily, or for any reason
whatsoever, solicit the trade or patronage of any of
Employer's existing customers or prospective customers
with whom Employer is negotiating, on the date of
termination, regardless of the location of such
customers or prospective customers of the Employer
throughout the United States with respect to any
technologies, services, product, trade secret, or other
matters in which the Employer is active.
6. All other provisions of the Agreement as Amended shall
remain in full force and effect and shall not be affected by
this Third Amendment.
IN WITNESS HEREOF, the parties hereto have executed this Third
Amendment, as of the date first written above.
EMPLOYER: EMPLOYEE:
MIDCOAST ENERGY RESOURCES, INC.
By: ________________________________
_____________________________
Xxx X. Xxxxxxx, President X. X.
Xxxxxxxxx, XX
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