Exhibit 10.1
AMENDMENT TO EMPLOYMENT AGREEMENT
By this Agreement, Sempra Energy (the "Company"), a California
corporation formerly known as Mineral Energy Company, and XXXXXXX XXXX
(the "Executive") amend the Employment Agreement (the "Agreement")
between Mineral Energy Company and Executive dated October 12, 1996, to
be effective December 1, 1998, as follows:
1. Xxxxxxxxx 0 (x) (xxx) of the Agreement is stricken and replaced
with the following language:
"(iii) the relocation of the Executive's principal place of
employment to a location away from the Company's headquarters or a
relocation of the Company's headquarters to a location further away
which is both further away from Executive's residence and more than
thirty (30) miles from such headquarters or a substantial increase in
the Executive's business travel obligations outside of the Southern
California area as of the Effective Date other than any such increase
that (A) arises in connection with extraordinary business activities of
the Company and (B) is understood not to be part of the Executive's
regular duties with the Company;"
2. Paragraph 5 (a) (vi) of the Agreement is modified in its opening
phrase to read:
"(vi) Continuation of Welfare Benefits. For a period of
three (3) years or until the Executive is eligible for retiree medical
benefits, whichever is longer, ..."
3. Paragraphs 5 (d), (e) and (f) of the Agreement are stricken and
replaced by the following:
"(d) Code Section 280G
(i) Gross-Up. Notwithstanding any other provisions of this Agreement,
in the event that any payment or benefit received or to be received by
the Executive (whether pursuant to the terms of this Agreement or any
other plan, arrangement or agreement with (A) the Company, (B) any
Person (as defined in Section 4(e))whose actions result in a Change in
Control or (C) any Person affiliated with the Company or such Person)
(all such payments and benefits, including the Severance Payments, being
hereinafter called the "Total Payments") would be subject (in whole or
part) to the tax (the "Excise Tax") imposed under section 4999 of the
Code, the Company shall pay to the Executive such additional amounts
(the "Gross-Up Payment") such that the net amount retained by the
Executive, after deduction of any Excise Tax on the Total Payments and
any federal, state and local income and employment taxes and Excise Tax
upon the Gross-Up Payment, shall be equal to the Total Payments. For
purposes of determining the amount of the Gross-Up Payment, the
Executive shall be deemed to pay federal income tax at the highest
marginal rate of federal income taxation in the calendar year in which
the Gross-Up Payment is to be made and state and local income taxes at
the highest marginal rate of taxation in the state and locality of the
Executive's residence on the date on which the Gross-Up Payment is
calculated for purposes of this section, net of the maximum reduction in
federal income taxes which could be obtained from deduction of such
state and local taxes. In the event that the Excise Tax is subsequently
determined to be less than the amount taken into account hereunder, the
Executive shall repay to the Company, at the time that the amount of
such reduction in Excise Tax is finally determined, the portion of the
Gross-Up Payment attributable to such reduction (plus that portion of
the Gross-Up Payment attributable to the Excise Tax and federal, state
and local income tax imposed on the Gross-Up Payment being repaid by the
Executive to the extent that such repayment results in a reduction in
Excise Tax and/or a federal, state or local income tax deduction) plus
interest on the amount of such repayment at the rate provided in section
1274(b)(2)(B) of the Code. In the event that the Excise Tax is
determined to exceed the amount taken into account hereunder (including
by reason of any payment the existence or amount of which cannot be
determined at the time of the Gross-Up Payment), the Company shall make
an additional Gross-Up Payment in respect of such excess (plus any
interest, penalties or additions payable by the Executive with respect
to such excess) at the time that the amount of such excess is finally
determined. The Executive and the Company shall each reasonably
cooperate with the other in connection with any administrative or
judicial proceedings concerning the existence or amount of liability for
Excise Tax with respect to the Total Payments.
(ii) Accounting Firm. All determinations to be made with respect to
this Section 5 (d) shall be made by the Company's independent accounting
firm (or, in the case of a payment following a Change in Control, the
accounting firm that was, immediately prior to the Change in Control,
the Company's independent auditor). The accounting firm shall be paid
by the Company for its services performed hereunder."
4. Sections 5 (e) and (f) of the Agreement are added to read:
"(e) Outplacement Services. The Executive shall receive
outplacement services suitable to his or her position for a period of
eighteen (18) months following the Date of Termination, or if earlier,
until the first acceptance of an offer of employment with a subsequent
employer, in an aggregate amount not to exceed $50,000.
(f) Financial Planning Services. The Executive shall
receive financial planning services for a period of eighteen (18) months
following the Date of Termination at a level consistent with the
benefits provided under the Company's financial planning program for the
Executive, as in effect immediately prior to the Date of Termination."
5. Section 5(h) of the Agreement is added to read:
(h) Notwithstanding anything contained herein, if a Change in
Control occurs and if, prior to the date of the Change in Control, the
Executive's employment is terminated by the Company (other than for
Cause, death or Disability), or by the Executive for Good Reason, and if
such Termination (i) was at the request of a third party who has taken
steps reasonably calculated to effect the Change in Control or (ii)
otherwise arose in connection with or in anticipation of the Change in
Control, then such Termination shall be treated as a Termination
following a Change in Control for purposes of this Agreement (including,
without limitation, for purposes of determining the amounts of the
Severance Payments under this Section 5).
6. Paragraph 8 ("Arbitration") of the Agreement is stricken and
replaced with the following language:
"8. Dispute Resolution.
Any disagreement, dispute, controversy or claim arising out of or
relating to this Agreement or the interpretation of this Agreement or
any arrangements relating to this Agreement or contemplated in this
Agreement or the breach, termination or invalidity thereof shall be
settled by final and binding arbitration administered by JAMS/Endispute
in San Diego, California in accordance with the then existing
JAMS/Endispute Arbitration Rules and Procedures for Employment Disputes.
In the event of such an arbitration proceeding, the Executive and the
Company shall select a mutually acceptable neutral arbitrator from among
the JAMS/Endispute panel of arbitrators. In the event the Executive and
the Company cannot agree on an arbitrator, the Administrator of
JAMS/Endispute will appoint an arbitrator. Neither the Executive nor
the Company nor the arbitrator shall disclose the existence, content, or
results of any arbitration hereunder without the prior written consent
of all parties. Except as provided herein, the Federal Arbitration Act
shall govern the interpretation, enforcement and all proceedings. The
arbitrator shall apply the substantive law (and the law of remedies, if
applicable) of the state of California, or federal law, or both, as
applicable and the arbitrator is without jurisdiction to apply any
different substantive law. The arbitrator shall have the authority to
entertain a motion to dismiss and/or a motion for summary judgment by
any party and shall apply the standards governing such motions under the
Federal Rules of Civil Procedure. The arbitrator shall render an award
and a written, reasoned opinion in support thereof. Judgment upon the
award may be entered in any court having jurisdiction thereof."
IN WITNESS WHEREOF, the Executive and, pursuant to authorization
from its Board of Directors, the Company have caused this Amendment to
Employment Agreement to be executed as of the effective date, above.
SEMPRA ENERGY
By: ________________________
Xxxxxxx X. Xxxxxx Chairman & Chief Executive Officer
________________________
XXXXXXX XXXX
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4TOPS/123198
4TOPS/123198
