EXHIBIT 10.1
FORM OF EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "AGREEMENT") entered into as
of the 1st day of July, 1998 between SOUTHWEST GAS CORPORATION, a
California corporation (the "COMPANY"), and ____________________
(the "EMPLOYEE").
1. DEFINITIONS
For the purposes of this Agreement:
(a) The term "COMPANY" shall include any corporate
successor to the business presently conducted by the
Company.
(b) The term "SUBSIDIARY" shall mean any corporation,
partnership, joint venture or other entity in which the
Company has a 50% or greater equity interest.
(c) "PERMANENT DISABILITY" shall mean that because of
physical or mental illness or disability, the Employee
shall have been continuously unable to perform the
essential functions of his job (as those functions are
described herein) with or without reasonable
accommodation for a consecutive period of at least six
months.
(d) The Employee shall be deemed to engage in a "COMPETING
BUSINESS" if, in any capacity, including but not
limited to proprietor, joint venturer, partner,
officer, director or employee, he engages or
participates, directly or indirectly, in the operation,
ownership or management of any proprietorship, joint
venture, partnership, corporation, limited liability
company, or other business entity which is in the
natural gas distribution business. Indirect
participation in the operation or ownership of any such
entity shall include any investment by the Employee in
any such entity, by way of loan, guarantee or stock or
equity ownership (other than ownership of 1% or less of
any class of the entity or other securities of a
company which is listed and regularly traded on any
national securities exchange or which is regularly
traded over-the-counter).
2. EMPLOYMENT: TERM OF AGREEMENT
(a) The Employee shall perform the duties of [Officer's
Title] of the Company and, as such, shall supervise and
direct the [affairs/operations] of the Company and, to
the extent practicable, any corporation, partnership,
joint venture or other entity in which the Company has
a 20% or greater equity interest. The Employee shall
also perform such duties related to the business and
affairs of the Company as may be delegated to him from
time to time by the Board of Directors of the Company
(the "BOARD") [or the President and CEO of the
Company].
(b) The Company agrees to employ the Employee and the
Employee agrees to serve the Company, in accordance
with the terms of this Agreement, for an initial term
of [24 or 36] months, commencing July 1, 1998. If a
Change in Control (as hereinafter defined) occurs, the
term of this Agreement shall be extended for a period
of 24 months from the date of the Change in Control.
Unless within 60 days prior to any anniversary date of
this Agreement (or, if a Change in Control has
occurred, the second anniversary of such Change in
Control and any succeeding anniversary thereof), the
Company (or the Employee) gives written notice to the
Employee (or the Company) of the termination of this
Agreement as of the then applicable expiration date,
then the term of this Agreement shall automatically be
extended for an additional 12 months.
3. COMPENSATION
The Employee shall receive the following compensation for
services during the term of his employment hereunder:
(a) The Employee's minimum base salary shall be $________
per annum, payable in installments in accordance with
the Company's regular payroll procedures, subject to
adjustment (but not below the minimum base salary
provided above) in accordance with the regular
procedures established by the Company for salary
adjustments;
(b) The Employee shall participate in: (i) any incentive
compensation plan, pension or profit sharing plans,
stock purchase plan or executive retirement plan
maintained by the Company for its employees in
accordance with the terms and conditions thereof; and
(ii) any annuity or group insurance benefit plan,
medical plan and other welfare/employee benefit plans
maintained by the Company for its executive employees,
in accordance with the terms and conditions thereof;
(c) The Company will provide the Employee with an active
membership, which shall include initiation fee and
dues, in a suitable country club of the Employee's
choice, said membership shall remain the Employee's
following the term of this Agreement but the Company
shall have no continuing obligation (unless otherwise
expressly provided herein) to pay dues or other fees or
expenses with respect thereto after the Employee's
termination; and
(d) The Company will provide a suitable automobile valued
at retail at approximately $_______, with the Company
assuming the expenses for insurance, repairs and
maintenance of the automobile.
The Company reserves the right to modify, suspend, or
discontinue any or all of its benefit programs referred to in
Section 3(b) at any time without recourse by the Employee
(subject to Section 9(b)(ii)(C)) so long as such action is taken
generally with respect to other similarly situated employees and
does not single out the Employee.
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4. DUTIES
The Employee agrees that at all times during the term
hereof, he will:
(a) Faithfully, industriously and to the best of his
ability, experience and talents, perform all of the
duties that may be required of and from him, and he
will fulfill all of his responsibilities hereunder
pursuant to the express and explicit terms hereof, to
the reasonable satisfaction of the Board;
(b) Devote all of his undivided time, attention, knowledge
and skills, during customary business hours, to the
business and interests of the Company, subject to such
holidays, personal holidays, reasonable vacations and
sick leave as are provided under the general policies
of the Company as they may exist from time to time;
(c) Comply with all the general rules and regulations of
the Company;
(d) Not engage in a Competing Business;
(e) Maintain his residence at a location within the city or
in or near a suburban community of the city in which
the executive offices of the Company are located, [or
the executive offices of a Company division if the
Employee is so assigned]; and
(f) Shall keep complete and accurate records of all
business or reimbursable expenditures such that the
Employee may fully account to the Board, if requested,
or as then may be required by the Internal Revenue
Service.
5. CONFIDENTIALITY
The Employee acknowledges that during his employment by, and
as a result of his relationship with, the Company he will obtain
knowledge of and gain access to information regarding the
Company's business, operations, products, proposed products,
production methods, processes, customer lists, advertising,
marketing and promotional plans and materials, price lists,
pricing policies, financial information and other trade secrets,
confidential information and material proprietary to the Company
or designated as being confidential by the Company which is not
generally known to non-Company personnel, including information
and material originated, discovered or developed in whole or in
part by the Employee (collectively referred to herein as
"CONFIDENTIAL INFORMATION"). The Employee agrees that during the
term of this Agreement and, to the fullest extent permitted by
law thereafter, he will, in a fiduciary capacity for the benefit
of the Company, hold all Confidential Information strictly in
confidence and will not directly or indirectly reveal, report,
disclose, publish or transfer any of such Confidential
Information to any person, firm or other entity, or utilize any
of the Confidential Information for any purpose, except in
furtherance of his employment by the Company.
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The Employee agrees that upon the expiration of this
Agreement or any earlier termination of his employment, he will
immediately surrender and return to the Company all lists, books,
records and other Confidential Information of the Company, or
obtained in connection with the Company's business, it being
expressly acknowledged by the Employee that all such items are
the exclusive property of the Company, and all other property
belonging to the Company then in the possession of the Employee,
and the Employee shall not make or retain any copies thereof.
6. TERMINATION DUE TO DEATH OR DISABILITY
The Employee's employment with the Company shall terminate:
(i) upon the Employee's death, or (ii) in the event of the
Permanent Disability of the Employee upon written notice given by
the Company to the Employee to that effect. In either case, the
Employee's salary shall immediately cease and the Employee (and
his beneficiaries or personal representatives) shall be entitled
to no other payment or benefits pursuant to this Agreement,
except for any vested rights the Employee (or his beneficiaries
or personal representatives) may have in items under Section
3(b).
7. OTHER TERMINATION
The Company may at any time terminate its employment of the
Employee for Cause (as hereinafter defined) upon written notice
to the Employee. In the event of such termination by the Company
for Cause, the Employee's salary shall immediately cease and the
Employee shall be entitled to no other payments or benefits
pursuant to this Agreement, except for any vested rights the
Employee may have in items under Section 3(b).
For purposes of this Agreement, "CAUSE" shall mean (i) any
material breach of any material provision of this Agreement by
the Employee which is not cured within 60 days after written
notice of such breach by the Company to the Employee,
(ii) conviction of the Employee of a felony or crime involving
moral turpitude (meaning a crime that necessarily includes the
commission of an act of gross depravity, dishonesty or bad
morals), or (iii) any acts or wilful malfeasance or gross
negligence in a matter of material importance to the Company.
The Company may at any time terminate its employment of the
Employee for any other reason, provided any such purported
termination must be on 60 days advance written notice to the
Employee (the date such notice is purported to be given is
referred to herein as the "COMPANY'S NOTICE DATE"). In such
event, the Employee's employment shall continue during the notice
period and shall terminate on the 60th day following the
Company's Notice Date (the "COMPANY'S TERMINATION DATE");
provided that during the 60-day notice period the Company may
place the Employee on a paid administrative leave.
The Employee may terminate his employment by giving written
notice to the Company of his intent to terminate (the date such
notice is purported to be given is referred to herein as the
"EMPLOYEE'S NOTICE DATE"). In such event, the Employee's
employment shall continue during the notice period and shall
terminate on the 60th day following the Employee's Notice Date or
such earlier date that the Company may consent to in writing (the
"EMPLOYEE'S TERMINATION DATE"). In the event that the Employee
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terminates without Good Reason (as hereinafter defined), the
Employee's salary shall cease as of the Employee's Termination
Date and, as of such date, the Employee shall be entitled to no
other benefits or payments pursuant to this Agreement, except for
any vested rights the Employee may have in items under
Section 3(b). Any termination by the Employee for Good Reason
shall set forth in reasonable detail the facts and circumstances
claimed to provide a basis for such termination.
8. TERMINATION BY THE COMPANY WITHOUT CAUSE OR BY THE EMPLOYEE
FOR GOOD REASON
Termination of employment by the Employee for Good Reason or
by the Company for any reason other than (i) death,
(ii) Permanent Disability, (iii) Cause, or (iv) upon expiration
of the term of this Agreement as provided in Section 2, shall
have the following effect:
(a) Any restricted stock awards, stock options or stock
appreciation rights to purchase or relating to Common
Stock of the Company held by the Employee on the
Company's Notice Date or Employee's Notice Date,
whichever first occurs, which are not then currently
vested or exercisable shall on such date automatically
become vested or exercisable and shall remain
exercisable for 90 days thereafter (subject to any
fixed term of such award, option or right set forth in
the document evidencing such award, option or right);
(b) The Company shall continue to pay the Employee his base
salary being paid at the time of notification, plus 20%
of his base salary in lieu of employee benefits for the
balance of the term of this Agreement [(not to exceed
18 months)];
(c) The Company shall pay the Employee his incentive
compensation, which shall be calculated as [60% or 90%]
of the Employee's base salary for the balance of the
term of this Agreement (such term calculated as though
such termination has not occurred and assuming no
additional automatic extensions) [(not to exceed 18
months)];
(d) The Company shall pay the Employee's expenses incurred
in finding new employment and costs of moving the
Employee and his family and possessions to a new
location or, in lieu of such moving expenses, a cash
payment of $75,000, with the choice to be the
Employee's;
(e) The Company shall pay the Employee's normal business
expenses incurred through the Company's Termination
Date or the Employee's Termination Date, whichever
first occurs (except with respect to seminars or travel
as provided below), including automobile, dues of the
club referred to in Section 3(c), plus any conventions,
seminars or travel either incurred prior to the
applicable termination date or scheduled at the time of
notification of termination;
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(f) The Company shall pay the Employee any benefits under
the Company's Deferred Compensation Plan (the "DCP")
and Supplemental Executive Retirement Plan (the
"SERP"), which are fully vested at the Company's
Termination Date or the Employee's Termination Date,
whichever first occurs, in accordance with applicable
payment schedules and any applicable elections;
provided, however that the Employee shall receive
additional benefits under the SERP such that the
Employee will be permitted to add to the formula for
purposes of eligibility for benefits, vesting and
calculation of benefits, [10 or 15] points which, at
the election of the Employee, may be applied either to
an age assumption or continuous length of service
assumption (e.g., if an officer is 50 and has 20 years
of service, he could allocate the points so that for
purposes of eligibility, vesting and calculation of
benefits, he is age 55 and has [25 or 30] years of
service);
(g) The Company will provide the Employee with suitable
office space (equivalent to that occupied by the
Employee on such notice date) and private secretarial
services away from the Company's offices in an office
complex of the Employee's choice in Las Vegas, Nevada
[or the division headquarters city where the Employee
was last assigned] for a period ending on the later of:
(i) the expiration of the term of this Agreement; or
(ii) the first anniversary of the Company's Termination
Date or the Employee's Termination Date, whichever
first occurs.
9. CHANGE IN CONTROL OF THE COMPANY
The Board recognizes that the continuing possibility of a
change in control of the Company is unsettling to the Employee
and other officers of the Company. Therefore, the arrangements
set forth below are being made to help assure a continuing
dedication by the Employee to his duties to the Company,
notwithstanding the occurrence or potential occurrence of a
change in control. In particular, the Board believes it
important, should the Company receive proposals from third
parties with respect to its future, to enable the Employee,
without being influenced by the uncertainties of his own
situation, to assess and advise the Board whether such proposals
would be in the best interests of the Company and its
shareholders and to take such other action regarding such
proposals as the Board might determine to be appropriate. The
Board also wishes to demonstrate to officers of the Company that
the Company is concerned with the welfare of its officers and
intends to see that loyal officers are treated fairly.
In view of the foregoing and in further consideration of the
Employee's continued employment with the Company, the Company
agrees as follows:
(a) Limited Right to Receive a Severance Benefit. The
Employee shall be entitled to the severance benefits
provided in Section 9(c), in lieu of the benefits
provided under Section 8 if, within 24 months after a
Change in Control: (i) the Employee terminates his
employment with the Company for Good Reason, provided
he terminates his employment within 120 days following
the occurrence of any of the events specified in
Section 9(b)(ii); or (ii) the Employee's employment is
terminated by the Company for any reason other than (A)
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the Employee's death, (B) the Employee's Permanent
Disability, (C) Cause, or (D) the expiration of the
term of this Agreement following the Change in Control
as provided in Section 2.
(b) Certain Additional Definitions. For purposes of this
Agreement:
(i) Change in Control. The term "CHANGE IN CONTROL"
shall mean any of the following:
(A) Approval by the shareholders of the Company
of the dissolution or liquidation of the
Company;
(B) Approval by the shareholders of the Company
of an agreement to merge or consolidate, or
otherwise reorganize, with or into one or
more entities that are not Subsidiaries, as a
result of which less than 50% of the
outstanding voting securities of the
surviving or resulting entity immediately
after the reorganization are, or will be,
owned, directly or indirectly, by
shareholders of the Company immediately
before such reorganization (assuming for
purposes of such determination that there is
no change in the record ownership of the
Company's securities from the record date for
such approval until such reorganization and
that such record owners hold no securities of
the other parties to such reorganization, but
including in such determination any
securities of the other parties to such
reorganization held by affiliates of the
Company);
(C) Approval by the shareholders of the Company
of the sale of substantially all of the
Company's business and/or assets to a person
or entity which is not a Subsidiary;
(D) Any "person" (as such term is used in
Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended (the
"EXCHANGE ACT"), but excluding any person
described in and satisfying the conditions of
Rule 13d-1(b)(1) thereunder), becomes the
beneficial owner (as defined in Rule 13d-3
under the Exchange Act), directly or
indirectly, of securities of the Company
representing more than 20% of the combined
voting power of the Company's then
outstanding securities entitled to then vote
generally in the election of directors of the
Company; or
(E) During any period not longer than two
consecutive years, individuals who at the
beginning of such period constituted the
Board cease to constitute at least a majority
thereof, unless the election, or the
nomination for election by the Company's
shareholders, of each new Board member was
approved by a vote of at least three-fourths
of the Board members then still in office who
were Board members at the beginning of such
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period (including for these purposes, new
members whose election was so approved).
(ii) Good Reason. For purposes of this Agreement,
"GOOD REASON" shall mean:
(A) Following a Change in Control: (1) without
the Employee's express written consent, the
assignment to him of any duties inconsistent
with his positions, duties, authority,
responsibilities and status with the Company
immediately prior to the Change in Control;
(2) a demotion or a change in the Employee's
titles or offices as in effect immediately
prior to the Change in Control; (3) any
removal of the Employee from or any failure
to re-elect him to any of such positions;
except in connection with the termination of
the Employee's employment for Cause,
Permanent Disability or retirement or as a
result of his death or by him other than for
Good Reason;
(B) A reduction by the Company in the Employee's
base salary as in effect on the date hereof
(or, if a Change in Control has occurred, a
reduction by the Company in the Employee's
base salary as in effect on the date of the
Change in Control);
(C) Following a Change in Control: (1) the
failure by the Company to continue at levels
in existence immediately prior to the Change
in Control any thrift, incentive or
compensation plan, or any pension, life
insurance, health and accident or disability
plan in which the Employee participated
immediately prior to the Change in Control,
provided that the Company may adopt
substantially similar plans that provide
benefits at levels no less than those in
existence immediately prior to the Change in
Control; (2) the taking of any action by the
Company which would adversely affect the
Employee's participation in or materially
reduce his aggregate benefits under all of
such plans, when taken together, or deprive
him of any material fringe benefit enjoyed by
him at the time of the Change in Control
(except for the acceleration of the
termination dates of options, awards and
rights as contemplated by this Agreement).
(D) Following a Change in Control, the assignment
of the Employee without his consent to a new
work location which would require a round-
trip commute to work from the Employee's
residence immediately prior to the Change in
Control of more than 40 miles per day.
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(E) Any material breach of any material provision
of this Agreement by the Company which is not
cured within 60 days after written notice of
such breach by the Employee to the Company.
(c) Effect of Termination. If the Employee is entitled to
receive a severance benefit pursuant to Section 9(a),
the Company will provide the Employee with only the
following severance benefits:
(i) The benefits specified in Section 8(a);
(ii) A lump sum severance payment equal to: (A) [24, 30
or 36] months of the Employee's yearly base salary
in effect as of the Employee's Notice Date or the
Company's Notice Date, whichever first occurs (or,
if greater, in effect on the date of the Change in
Control); (B) [24, 30, or 36] months incentive
compensation calculated as [60% or 90%] of the
amount payable pursuant to clause (A); and (C)
[24, 30 or 36] months fringe benefits calculated
as 20% of the amount payable pursuant to clause
(A);
(iii) The benefits specified in Section 8(d);
(iv) The benefits specified in Section 8(e);
(v) Any benefits under the DCP and the SERP which are
fully vested at the Company's Termination Date or
the Employee's Termination Date, whichever first
occurs, in accordance with applicable payment
schedules and any applicable elections; provided,
however that the Employee shall receive additional
benefits under the SERP such that the Employee
will be permitted to add to the formula for
purposes of eligibility for benefits, vesting and
calculation of benefits, [10 or 15] points which,
at the election of the Employee, may be applied
either to an age assumption or continuous length
of service assumption (See Section 8(f) for
illustration); such amounts having been deposited
with a trustee under an appropriate Trust
Agreement providing for a so-called Rabbi Trust
Arrangement pursuant to I.R.S. Rev. Proc. 92-64,
as described in Section 19; and
(vi) Suitable office space (equivalent to that occupied
by the Employee on the Employee's Notice Date or
the Company's Notice Date, whichever first occurs)
and private secretarial services away from the
Company's offices in an office complex of the
Employee's choice in Las Vegas, Nevada [or the
division headquarters city where the Employee was
last assigned] for a period ending on the earlier
of (A) the second anniversary of the Employee's
Notice Date, or (B) the date the Employee secures
suitable other employment.
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10. RESTRICTIVE COVENANT
In consideration of the Company's agreements contained
herein and the payments to be made by it to the Employee pursuant
hereto, the Employee agrees that, during the period of his
employment hereunder and for a further period expiring 12 months
following the end of the term of this Agreement or any extensions
or renewal thereof, the Employee will not, without the written
consent of the Board of Directors of the Company, engage in a
Competing Business within the geographical limits of any state
(or such lesser geographical area as may be set by a court of
competent jurisdiction) in which any of the businesses of the
Company are being conducted on the date of any such termination.
The Employee acknowledges and agrees that a breach by the
Employee of the provisions of this Section 10 will constitute
such damage as will be irreparable and the exact amount of which
will be impossible to ascertain and, for that reason, agrees that
the Company will be entitled to an injunction to be issued by any
court of competent jurisdiction restraining and enjoining the
Employee from violating the provisions of this Section 10. The
right of an injunction shall be in addition to and not in lieu of
any other remedy available to the Company for such breach or
threatened breach, including the recovery of damages from the
Employee.
Termination of this Agreement, whether by passage of time or
any other cause, shall not constitute a waiver of the Company's
rights under this Section 10, nor a release of the Employee from
his obligations hereunder.
11. ARBITRATION AND LITIGATION
In the event the Company terminates the Employee by reason
of his Permanent Disability or for Cause and the Employee
disputes the accuracy of the assertion of Permanent Disability or
Cause, or in the event the Employee terminates his employment for
Good Reason and the Company disputes the accuracy of such
assertion of Good Reason, or in the event either party disputes
the occurrence of a Change in Control, such dispute shall be
resolved through final and binding arbitration in Xxxxx County,
Nevada in accordance with the then current commercial arbitration
rules of the American Arbitration Association ("ASSOCIATION") or
its successor, provided the Employee or the Company files a
written demand for arbitration at a regional office of the
Association within 30 calendar days following the date the
Employee notifies the Company that he disputes the accuracy of
the assertion of Permanent Disability or Cause or Change in
Control, or the Company notifies the Employee that it disputes
the accuracy of the assertion of Good Reason or Change in
Control. In no event shall a demand for arbitration be made
after the date when institution of legal or equitable proceedings
based on the dispute in question would be barred by any
applicable statute of limitations. In the event the Arbitrator
finds that the termination by the Company was not for Permanent
Disability or not for Cause or that the termination by the
Employee was for Good Reason, or that a Change in Control has
occurred and such issue was challenged by the Company, the
Employee shall not be entitled to reinstatement, but shall be
entitled to the appropriate benefits under Section 8 or Section
9, as applicable, and payment of his reasonable legal expenses in
such arbitration. Any reasonableness of costs and expenses shall
be determined by the arbitrator.
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Should the Employee at any time bring suit against the
Company for breach of this Agreement (not including any matter
required to be submitted to arbitration pursuant to the foregoing
provisions of this Section 11) and obtain judgment in his favor,
the Company shall pay his reasonable legal expenses and costs of
suit. The provisions of this Section 11 shall in no way limit
the right of any party to exercise self-help remedies or to
obtain provisional or ancillary relief from a court of competent
jurisdiction before, after, or during the pendency of any
arbitration proceeding. The exercise of such remedy shall not
waive the right of any party to resort to arbitration. The
parties each acknowledge and agree that to any extent any legal
proceeding other than arbitration is permitted in this Section
11, the Superior Court of the State of Nevada in and for Xxxxx
County, and the associated federal and appellate courts, shall
have exclusive jurisdiction over such legal proceedings.
Except as may be necessary to enter judgment upon the award
or to the extent required by applicable law, all claims, defenses
and proceedings (including, without limiting the generality of
the foregoing, the existence of the controversy and the fact that
there is an arbitration proceeding) shall be treated in a
confidential manner by the arbitrator, the parties and their
counsel, and each of their agents and employees, and all others
acting on behalf or in concert with them. Without limiting the
generality of the foregoing, no one shall divulge to any third
party or person not directly involved in the arbitration, the
contents of the pleadings, papers, orders, hearings, trials, or
awards in the arbitration, except as may be necessary to enter
judgment upon an award as required by applicable law. Any court
proceedings relating to the arbitration hereunder, including,
without limiting the generality of the foregoing, to prevent or
compel arbitration to perform, correct, vacate or otherwise
enforce an arbitration award, shall be filed under seal with the
court, to the extent permitted by law.
12. BENEFIT AND BINDING EFFECT
This Agreement shall inure to the benefit of and be binding
upon the Company, its successors and assigns, including but not
limited to any corporation, person or other entity which may
acquire all or substantially all of the assets and business of
the Company or any corporation with or into which the Company may
be consolidated or merged and the Employee, his heirs, executors,
administrators and legal representatives, provided that the
obligations of the Employee hereunder may not be delegated.
13. OTHER AGREEMENTS
The Employee represents that the execution and performance
of this Agreement will not result in a breach of any of the terms
and conditions of any employment or other agreement between the
Employee and any third party.
In the event the Company shall elect to insure all or part
of its liability for providing health and long-term disability
benefits under this Agreement, the Employee shall submit to such
reasonable physical examination as the Company may request.
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Provided that the Company duly performs all of its
obligations (if any) arising by virtue of a termination of or by
the Employee, the Employee will not publicly disparage the
Company or its officers, directors, employees or agents and will
refrain from any action which would reasonably be expected to
cause material adverse public relations or embarrassment to the
Company or to any of such persons. Similarly, the Company
(including its officers, directors, employees and agents) will
not disparage the Employee and will refrain from any action which
would reasonably be expected to result in embarrassment to the
Employee or to materially and adversely affect his opportunities
for employment. The preceding two sentences shall not apply to
disclosures required by applicable law, regulation or order of a
court or governmental agency.
The Company may withhold from any amounts payable under this
Agreement all federal, state, local and foreign taxes as may be
required to be withheld pursuant to any applicable law or
regulation.
14. NOTICES
All notices or other communications relating to this
Agreement shall be in writing and delivered personally or sent by
registered or certified mail, postage prepaid and return receipt
requested, to the party concerned at the address set forth below:
If to the Company, to: Southwest Gas Corporation
0000 Xxxxxx Xxxxxxxx Xxxx
Xxx Xxxxx, Xxxxxx 00000
Attn: General Counsel
If to the Employee, to: [Employee's Name]
Either party may change the address to which notices are to
be sent to it by giving 10 days written notice of such change of
address to the other party in the manner provided above for
giving notice. Notices will be considered delivered on the date
of personal delivery or on the date of deposit in the United
States mail in the manner provided for giving notice by mail.
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15. PARACHUTE PAYMENTS
(a) In the event that any payment or distribution by the
Company to or for the benefit of the Employee (whether
paid or payable or distributed or distributable
pursuant to the terms of this Agreement or otherwise,
but determined without regard to any additional
payments under this Section 15(a)) (a "PAYMENT") is
determined to be subject to the excise tax imposed by
Section 4999 of the Internal Revenue Code of 1986, as
amended (the "CODE"), or any interest or penalties are
incurred by the Employee with respect to such excise
tax (such excise tax, together with any such interest
and penalties, are hereinafter collectively referred to
as the "EXCISE TAX"), then the Company shall pay to the
Employee an additional payment (a "GROSS-UP PAYMENT")
in an amount such that after payment by the Employee of
all taxes (including any interest or penalties imposed
with respect to such taxes), including, without
limitation, any income taxes (and any interest and
penalties imposed with respect thereto) and Excise Tax
imposed upon the Gross-Up Payment, the Employee retains
an amount of the Gross-Up Payment equal to the Excise
Tax imposed upon the Payments.
(b) Subject to the provisions of Section 15(c), all
determinations required to be made under this Section
15, including whether and when a Gross-Up Payment is
required and the amount of such Gross-Up Payment and
the assumptions to be utilized in arriving at such
determination, shall be made by a nationally recognized
certified public accounting firm which is satisfactory
to the Company (the "Accounting Firm"), which shall
provide detailed supporting calculations both to the
Company and the Employee within 15 business days after
such determinations are requested by the Employee or
the Company. All fees and expenses of the Accounting
Firm shall be borne solely by the Company. Any
Gross-Up Payment, as determined pursuant to this
Section 15(b), shall be paid by the Company to the
Employee within five days after the Company's receipt
of the Accounting Firm's determination. As a result of
the uncertainty in the application of Section 4999 of
the Code at the time of the initial determination by
the Accounting Firm hereunder, it is possible that
Gross-Up Payments which will not have been made by the
Company should have been made ("UNDERPAYMENT"),
consistent with the calculations required to be made
hereunder. In the event that the Company exhausts its
remedies pursuant to Section 15(c) and the Employee
thereafter is required to make a payment of any Excise
Tax, the Accounting Firm shall determine the amount of
the Underpayment that has occurred and any such
Underpayment shall be promptly paid by the Company to
or for the benefit of the Employee.
(c) The Employee shall notify the Company in writing of any
claim by the Internal Revenue Service that, if
successful, would require the payment by the Company of
a Gross-Up Payment. Such notification shall be given
as soon as practicable but no later than ten business
days after the Employee is informed in writing of such
claim and shall apprise the Company of the nature of
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such claim, and the date on which such claim is
requested to be paid. The Employee shall not pay such
claim prior to the expiration of the 30-day period
following the date on which it gives such notice to the
Company (or such shorter period ending on the date that
any payment of taxes with respect to such claim is
due). If the Company notifies the Employee in writing
prior to the expiration of such period that it desires
to contest such claim, the Employee shall:
(i) give the Company any information reasonably
requested by the Company relating to such claim,
(ii) take such action in connection with contesting
such claim as the Company shall reasonably request
in writing from time to time, including, without
limitation, accepting legal representation with
respect to such claim by an attorney reasonably
selected by the Company,
(iii) cooperate with the Company in good faith in
order to contest such claim effectively, and
(iv) permit the Company to participate in any
proceedings relating to such claim;
provided, however, that the Company shall bear and pay
directly all costs and expenses (including additional
interest and penalties) incurred in connection with
such contest and shall indemnify and hold the Employee
harmless, on an after-tax basis, for any Excise Tax or
income tax (including interest and penalties with
respect thereto) imposed as a result of such
representation and payment of costs and expenses.
Without limitation on the foregoing provisions of this
Section 15(c), the Company shall control all
proceedings taken in connection with such contest and,
at its sole option, may pursue or forgo any and all
administrative appeals, proceedings, hearings and
conferences with the taxing authority in respect of
such claim and may, at its sole option, either direct
the Employee to pay the tax claimed and xxx for a
refund or contest the claim in any permissible manner,
and the Employee agrees to prosecute such contest to a
determination before any administrative tribunal, in a
court of initial jurisdiction and in one or more
appellate courts, as the Company shall determine;
provided, however, that if the Company directs the
Employee to pay such claim and xxx for a refund, the
Company shall advance the amount of such payment to the
Employee, on an interest-free basis and shall indemnify
and hold the Employee harmless, on an after-tax basis,
from any Excise Tax or income tax (including interest
or penalties with respect thereto) imposed with respect
to such advance or with respect to any imputed income
with respect to such advance; and further provided that
any extension of the statute of limitations relating to
payment of taxes for the taxable year of the Employee
with respect to which such contested amount is claimed
to be due is limited solely to such contested amount.
Furthermore, the Company's control of the contest shall
be limited to issues with respect to which a Gross-Up
14
Payment would be payable hereunder and the Employee
shall be entitled to settle or contest, as the case may
be, any other issue raised by the Internal Revenue
Service or any other taxing authority.
(d) If, after the receipt by the Employee of an amount
advanced by the Company pursuant to Section 15(c) the
Employee becomes entitled to receive any refund with
respect to such claim, or if the actual amount of the
Excise Tax is less than the amount of the Gross-Up
Payment, the Employee shall (subject to the Company's
complying with the requirements of Section 15(c))
promptly pay to the Company the amount of such refund
(together with any interest paid or credited thereon
after taxes applicable thereto) or the amount of such
difference. If, after the receipt by the Employee of
an amount advanced by the Company pursuant to Section
15(c), a determination is made that the Employee shall
not be entitled to any refund with respect to such
claim and the Company does not notify the Employee in
writing of its intent to contest such denial of refund
prior to the expiration of 30 days after such
determination, then such advance shall be forgiven and
shall not be required to be repaid and the amount of
such advance shall offset, to the extent thereof, the
amount of Gross-Up Payment required to be paid.
16. ENTIRE AGREEMENT
The entire understanding and agreement between the parties
has been incorporated into this Agreement, and this Agreement
supersedes all other agreements, negotiations, and understandings
between the Employee and the Company with respect to the
employment of the Employee by the Company (including any prior
employment agreements or change in control agreements between the
Employee and the Company). This Agreement may not be amended
orally, but only by an agreement in writing signed by both
parties.
17. GOVERNING LAW
This Agreement shall be governed by and interpreted in
accordance with the laws of the State of Nevada. It is intended
by the parties that this Agreement be interpreted in accordance
with its fair and simple meaning, not for or against either
party, and neither party shall be deemed to be the drafter of
this Agreement.
18. CAPTIONS; COUNTERPARTS
The section headings and captions included herein are for
convenience and shall not constitute a part of this Agreement.
This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, but all
of which shall together constitute one and the same Agreement.
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19. FUNDING OF CERTAIN SEVERANCE BENEFITS
The method of providing funding for the amounts payable
under Section 9(c)(v) shall be by way of a Rabbi Trust. Such
trust shall be established by the Company upon a Change in
Control with either (i) a major bank located in a major city of
the United States or (ii) any other party located in a major city
of the United States that may be granted corporate trustee powers
under state law, in favor of the Employee. Such trust shall not
be revocable and shall continue until such trust is terminated in
accordance with the termination provisions set forth in the Trust
Agreement described in Section 9(c)(v).
20. SEVERABILITY
If any portion or provision of this Agreement is determined
by arbitration or by a court of competent jurisdiction to be
invalid, illegal or unenforceable, the remaining portions or
provisions hereof shall not be affected.
IN WITNESS WHEREOF, this Employment Agreement has been
executed by the parties hereto as of the date first written
above.
SOUTHWEST GAS CORPORATION
By:
Print Name:
Its:
THE EMPLOYEE
[Employee]
Significant terms of employment and change in control agreements by
individual officer.
Minimum Incentive Additional Severance Change in control
annual compensation SERP benefits lump-sum
base salary percentage points maximum months salary benefit
----------- ------------ ------------ -------------- -----------------
Xxxxxxx X. Xxxxxx $ 475,000 90% 15 points 36 months 36 months
Xxxxxx X. Xxxxx $ 220,000 60% 15 points 18 months 30 months
Xxxxx X. Xxxx $ 150,000 60% 10 points 18 months 30 months
Xxxxx X. Xxxxxx $ 165,000 60% 10 points 18 months 24 months
Xxxxxx X. Xxxxxxx $ 164,000 60% 10 points 18 months 24 months
Xxxxxx X. Xxx $ 172,000 60% 10 points 18 months 30 months
Xxxxxx X Xxxxxxxx $ 143,000 60% 10 points 18 months 24 months
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