EMPLOYMENT AGREEMENT
Exhibit 10.5
EXECUTION
COPY
EMPLOYMENT
AGREEMENT (the “Agreement”) dated May 9, 2008
is made and executed to be effective as of the Closing Date, by and between CEP
Operating Company LLC, a Delaware Limited Liability Company (“CEP OPCO”), GSC Acquisition
Company, a Delaware Corporation (“GSCAC”) (CEP OPCO, GSCAC and
their respective Subsidiaries are collectively referred to herein as the “Company”) and Xxxx X. Xxxxxx
(“Executive”). Defined
terms used herein have the meaning attributed thereto in the text hereof or, if
not so defined, as set forth in Section 12.
WHEREAS,
GSCAC, GSCAC Holdings I LLC, a Delaware Limited Liability Company, GSCAC
Holdings II LLC, a Delaware Limited Liability Company, GSCAC Merger Sub LLC, a
Delaware Limited Liability Company (“MergerSub”) and Complete
Energy Holdings, LLC, a Delaware Limited Liability Company (“CEH”) entered into an
Agreement and Plan of Merger, dated as of May 9, 2008, (the “Merger Agreement”) upon the
consummation of which Merger Sub will be merged with and into CEH, with CEH as
the surviving entity;
WHEREAS,
in connection with and by virtue of the transactions contemplated by the Merger
Agreement, GSCAC will become the ultimate parent of the Company;
and
WHEREAS,
the Company and Executive desire to memorialize in this Agreement the terms of
Executive’s employment with the Company effective as of the consummation of the
transactions contemplated by such Merger Agreement (the “Merger”), with the
understanding that this Agreement shall supersede any and all prior agreements
relating to Executive’s employment with the Company, GSCAC or any subsidiary or
affiliate of either in all respects;
NOW,
THEREFORE, in consideration of the premises and mutual covenants herein and for
other good and valuable consideration, the parties agree as
follows:
1. Employment; Term of
Employment. The Company hereby employs Executive, and
Executive hereby accepts employment with the Company, on the terms and
conditions hereinafter set forth. The initial term of this Agreement
shall commence and shall be effective as of the Closing Date (as defined in the
Merger Agreement) and shall extend from that date for three (3) years unless
earlier terminated pursuant to Section 7 of this
Agreement; provided
that the Employment Term shall be automatically extended for successive one year
periods unless not later than thirty (30) days prior to such automatic extension
the Company or Executive shall have given written notice to the
contrary.
2. Position.
(a) Executive
shall serve as President and Chief Operating Officer of the
Company. In such positions, Executive shall have such duties and
authority as shall be determined from time to time by the Board or its
designee. While serving in such positions, Executive shall report to
the Chief Executive Officer of the Company.
(b) During the
term of Executive’s employment hereunder, Executive will devote substantially
all of Executive’s business time and best efforts to the performance of
Executive’s duties hereunder and will not engage in any other business,
profession or occupation for compensation or otherwise which would conflict with
the rendition of such services either directly or indirectly, without the prior
written consent of the Board; provided, however, that
nothing herein shall be deemed to preclude Executive from serving on the Board
of Directors of any charitable organization provided that such activities do not
materially interfere with the performance of Executive’s duties
hereunder.
3. Base
Salary. Company shall pay Executive an annual base salary, (as
it may be increased from time to time, “Base Salary”) at the initial
annual rate of $490,000, payable in arrears in accordance with the Company’s
usual payment practices during the Employment Term. The Executive
shall be entitled to such increases in Executive’s Base Salary as may be
determined from time to time in the sole discretion of the Board.
4. Bonus. Executive
shall be eligible to receive a cash bonus opportunity (the “Bonus”) under the annual
incentive plan, if any, established and maintained by the Board during the
Employment Term. The terms and amount of such Bonus, if any, shall be
determined by the Board in its sole discretion.
5. Employee
Benefits. Executive shall be provided employee benefits
(including fringe benefits, vacation, pension and profit sharing plan
participation and life, health, accident and disability insurance) on the same
basis as those benefits are generally made available to senior executives of the
Company.
6. Business Expenses and
Perquisites. Reasonable and documented travel, entertainment
and other business expenses incurred by Executive in the performance of
Executive’s duties hereunder shall be reimbursed by the Company in accordance
with Company policies.
7. Termination.
(a) By the Company for
Cause. Executive’s employment hereunder may be terminated by
the Company for Cause. If Executive is terminated for Cause,
Executive shall be entitled to receive a lump sum, in cash, equal to Executive’s
earned but unpaid Base Salary and any other vested but unpaid cash entitlements
for the period through and including the date of termination of
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Executive’s
employment, including unused earned vacation pay and unreimbursed documented
business expenses (collectively, “Accrued Compensation”) provided, however, that if
the Notice of Termination provided to Executive in connection with the
termination of Executive’s employment under this Section 7(a) cites clause (ii)
of the definition of Cause as the reason for such termination and the facts
recited in such Notice as the basis for such termination do not result in
Executive’s conviction of, or plea of no-contest to, a felony within a
reasonable time taking into account all relevant facts, Executive shall be
entitled to a lump sum cash payment of the amount set forth in Section
7(c)(B). All other benefits due Executive following Executive’s
termination of employment pursuant to this Subsection 7(a) shall be determined
in accordance with the plans, policies and practices of the
Company.
(b) Disability or
Death. Executive’s employment hereunder shall terminate upon
Executive’s death or if Executive becomes physically or mentally incapacitated
and is therefore unable for a period of 90 consecutive calendar days or for 120
calendar days in any consecutive 12 month period to perform his duties hereunder
(such incapacity is hereinafter referred to as “Disability”). Any
question as to the existence of the Disability of Executive as to which
Executive and the Company cannot agree shall be determined in writing by a
qualified independent physician mutually acceptable to Executive and the
Company. If Executive and the Company cannot agree as to a qualified
independent physician, each shall appoint such a physician and those two
physicians shall select a third who shall make such determination in
writing. The determination of Disability made in writing to the
Company and Executive shall be final and conclusive for all purposes of the
Agreement. Upon any termination for death or Disability, Executive
shall be entitled to the Accrued Compensation and Pro-Rata Bonus Amount and,
notwithstanding any provision of any stock option plan or stock option agreement
to the contrary, Executive’s outstanding stock options shall become fully
exercisable and nonforfeitable to the extent such stock options are not
otherwise fully exercisable and nonforfeitable. All other benefits
due Executive following Executive’s termination for Disability or death shall be
determined in accordance with the plans, policies and practices of the
Company.
(c) Without Cause by the
Company. If Executive’s employment is terminated by the
Company without “Cause” (other than by reason of Disability or death), the
Company shall pay to Executive (A) the Accrued Compensation and (B) $1,000,000
payable in cash in 12 equal monthly installments and, notwithstanding any
provision of any stock option plan or stock option agreement to the contrary,
the Company shall cause Executive’s outstanding stock options to become fully
exercisable and nonforfeitable to the extent such stock options are not
otherwise fully exercisable and nonforfeitable; provided, however, that the
post-employment exercise period for such options shall not be extended beyond
the normal post-employment exercise term provided in the applicable option plan
and agreement; provided,
further, that the Company’s obligations to make the payments described in
this Section 7(c)(B) and to cause Executive’s outstanding
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stock
options to become fully exercisable shall be subject to and conditioned upon
Executive’s delivery to the Company of a general release in form and substance
reasonably satisfactory to the Company that is effective and irrevocable within
55 days after the date of the termination of Executive’s employment with the
Company. Payment of the first installment described in Clause (B)
shall be made within five business days after the date Executive’s release
becomes irrevocable according to its terms and each subsequent installment shall
be paid on first day of each subsequent calendar month; provided, further, that if
Executive is a specified employee (as such term is defined in Section 409A of
the Code), then, with respect to any payments of such installment amounts that
(x) are not short-term deferrals within the meaning of Section 409A of the Code,
(y) would be paid during the first six months following the date of Executive’s
termination of employment, and (z) exceed in the aggregate during such six-month
period two times the lesser of Executive’s annualized compensation based upon
Executive’s annual rate of pay for services during the taxable year of Executive
preceding the year in which the termination of employment occurs (adjusted for
any increase during that year that was expected to continue indefinitely had no
termination of employment occurred) or the maximum amount of compensation that
may be taken into account under a qualified plan pursuant to Section 401(a)(17)
of the Code for the year in which the termination of employment occurs, such
payments of installment amounts in excess of the amount described in clause (z)
above that would otherwise have been paid during such six-month period shall be
accumulated and paid on the date that is six months after the date of
Executive’s termination of employment or such earlier date upon which such
amount can be paid or provided under Section 409A of the Code without being
subject to additional taxes and interest. The right to payment of the
installment amounts pursuant to this paragraph shall be treated as a right to a
series of separate payments for purposes of Section 409A of the
Code. All other benefits due Executive following Executive’s
termination of employment by the Company without Cause shall be determined in
accordance with the plans, policies and practices of the Company. For
the avoidance of doubt, delivery by the Company of a notice of non-extension as
provided in Section 1 shall not constitute a termination of employment without
Cause hereunder.
(d) Termination
by Executive.
(i) If
Executive terminates Executive’s employment with the Company within 60 days
following and in connection with or based upon a Good Reason Event as provided
below, Executive shall be entitled to the same payments and benefits Executive
would have received if Executive’s employment had been terminated by the Company
without Cause (other than by reason of Disability or death) pursuant to Section
7(c). Prior to Executive’s termination of employment under this
Section 7(d)(i), Executive must give written notice to Company of the Company
actions or failures to act constituting the Good Reason
Event. Executive shall be entitled to terminate employment under this
Section 7(d)(i) only if the
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Company
actions or failures to act set forth in such notice have not been corrected by
the Company within the 30 days following the Company’s receipt
thereof.
(ii) If
Executive terminates Executive’s employment with the Company for any reason
other than a Good Reason Event, Executive shall be entitled to the Accrued
Compensation.
(iii) All other
benefits due Executive following Executive’s termination of employment pursuant
to this Subsection 7(d) shall be determined in accordance with the plans,
policies and practices of the Company.
(e) Notice of
Termination. Any purported termination of employment by the
Company or by Executive shall be communicated by written Notice of Termination
to the other party hereto in accordance with Section 11(h) hereof.
(f) Effect of
Termination. Any termination of Executive’s employment with
the Company shall also be deemed and shall constitute, without any action by
Executive or the Company or any subsidiary thereof required, termination of all
Executive’s positions with the Company and its subsidiaries, including
membership or service on any boards of directors thereof.
(g) Certain Delayed
Payments. Notwithstanding any provision of this Agreement to
the contrary, if the payment of any amount or benefit under this Agreement would
be subject to additional taxes and interest under Section 409A of the Code if
the timing of such payment were not delayed as provided in Section
409A(a)(2)(B)(i) of the Code and the regulations thereunder, then any such
payment or benefit that Executive would otherwise be entitled to during the
first six months following the date of Executive’s termination of employment
shall be accumulated and paid or provided, as applicable, on the date that is
six months after the date of Executive’s termination of employment (or if such
date does not fall on a business day of the Company, the next following business
day of the Company), or such earlier date upon which such amount can be paid or
provided under Section 409A of the Code without being subject to such additional
taxes and interest. If the provisions of the preceding sentence
become applicable such that the payment of any amount is delayed, any payments
that are so delayed shall accrue interest on a non-compounded basis, from the
date of Executive’s termination of employment to the actual date of payment, at
the prime or base rate of interest announced by JPMorgan Chase Bank (or any
successor thereto) at its principal office in New York on the date of such
termination (or the first business day following such date if such termination
does not occur on a business day) and shall be paid in a lump sum on the actual
date of payment of the delayed payment amount. Executive hereby
agrees to be bound by the Company’s determination of its “specified employees”
(as such term is defined in Section 409A of the Code) in
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accordance
with any of the methods permitted under the regulations issued under Section
409A of the Code.
(h) Additional Payments by the
Company.
(i) Notwithstanding
anything to the contrary in this Agreement, in the event that any payment or
distribution by the Company to or for the benefit of Executive, whether paid or
payable or distributed or distributable pursuant to the terms of this Agreement
or otherwise (a “Payment”), is subject to the
excise tax imposed by Section 4999 of the Code, or any interest or penalties
with respect to such excise tax (such excise tax, together with any such
interest or penalties, are hereinafter collectively referred to as the “Excise Tax”), the Company
shall pay to Executive an additional payment (a “Gross-up Payment”) in an
amount such that after payment by Executive of all taxes (including any interest
or penalties imposed with respect to such taxes), including any Excise Tax
imposed on any Gross-up Payment, Executive retains an amount of the Gross-up
Payment equal to the Excise Tax imposed upon the Payments. The
Gross-up Payment attributable to a particular Payment shall be made at the time
such Payment is made; provided, however, that in no event shall the Gross-up
Payment be made later than the end of Executive’s taxable year next following
Executive’s taxable year in which Executive remits the related
taxes.
(ii) Except as
provided below, the determination that a Payment is subject to an Excise Tax
shall be made in writing by a nationally recognized accounting firm or executive
compensation consulting firm selected by the Company (the “Accounting
Firm”). Such determination shall include the amount of the
Gross-Up Payment and detailed computations thereof, including any assumptions
used in such computations. Any determination by the Accounting Firm
will be binding on the Company and the Executive. The Company and Executive
shall make an initial determination as to whether a Gross-up Payment is required
and the amount of any such Gross-up Payment. Executive shall notify
the Company in writing of any claim by the Internal Revenue Service which, if
successful, would require the Company to make a Gross-up Payment (or a Gross-up
Payment in excess of that, if any, initially determined by the Accounting Firm)
within 10 days of the receipt of such claim. The Company shall notify
Executive in writing at least 10 days prior to the due date of any response
required with respect to such claim if it plans to contest the
claim. The Executive shall not pay such claim prior to the expiration
of the 10-day period following the date on which the Executive gives such notice
to the Company (or such shorter period ending on the date that any payment of
taxes, interest, penalties or additions to tax with respect to such claim is
due). If the Company notifies the Executive in writing prior to the
expiration of such 10-day
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period
(regardless of whether such claim was earlier paid as contemplated by the
preceding parenthetical) that it desires to contest such claim, the Executive
shall: (A) give the Company any information reasonably requested by the Company
relating to such claim; (B) 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 selected by the Company; (C) cooperate with the
Company in good faith in order effectively to contest such claim; and (D) permit
the Company to participate in any proceedings relating to such
claim; provided,
however, the Company shall bear and pay directly or indirectly all costs
and expenses (including additional interest and penalties) incurred in
connection with such action and shall indemnify and hold Executive 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 the Company’s
action.
(iii) Without
limitation on the foregoing provisions of this Section 7(h), and to the extent
its actions do not unreasonably interfere with or prejudice the Executive’s
disputes with the Internal Revenue Service as to other issues, the Company shall
control all proceedings taken in connection with such contest and, in its
reasonable discretion, may pursue or forego any and all administrative appeals,
proceedings, hearings and conferences with the Internal Revenue
Service in respect of such claim and may, at its or in their sole
option, either direct the Executive to pay the tax, interest or penalties
claimed and xxx for a refund or contest the claim in any permissible manner, and
the Executive 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 Executive to pay such claim and xxx for a refund, the
Company shall advance an amount equal to such payment to the Executive, on an
interest-free basis, and shall indemnify and hold the Executive harmless, on an
after-tax basis, from all taxes (including, without limitation, income and
excise taxes), interest, penalties and additions to tax imposed with respect to
such advance or with respect to any imputed income with respect to such advance,
as any such amounts are incurred; and, further, provided, that any extension of
the statute of limitations relating to payment of taxes, interest, penalties or
additions to tax for the taxable year of the Executive with respect to which
such contested amount is claimed to be due is limited solely to such contested
amount; and, provided, further, that any settlement of any claim shall be
reasonably acceptable to the Executive, and the Company’s control of the contest
shall be limited to issues with respect to which a Gross-Up Payment would be
payable hereunder, and the Executive shall be entitled to settle or contest, as
the case may be, any other issue. If, as a result of the
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Company’s
action with respect to a claim, Executive receives a refund of any amount paid
by the Company with respect to such claim, Executive shall promptly pay such
refund to the Company. If the Company fails to timely notify
Executive whether it will contest such claim or Company determines not to
contest such claim, then the Company shall immediately pay to Executive the
portion of such claim, if any, which it has not previously paid to
Executive.
(iv) It is
possible that no Gross-Up Payment will initially be made but that a Gross-Up
Payment should have been made, or that a Gross-Up Payment will initially be made
in an amount that is less than what should have been made (either of such events
is referred to as an “Underpayment”). It
is also possible that a Gross-Up Payment will initially be made in an amount
that is greater than what should have been made (an “Overpayment”). The
determination of any Underpayment or Overpayment shall be made by the Accounting
Firm in accordance with Subsection (ii). In the event of an
Underpayment, the amount of any such Underpayment shall be paid to the Executive
as an additional Gross-Up Payment. In the event of an Overpayment,
the Executive shall promptly pay to the Company the amount of such Overpayment
together with interest on such amount at the applicable Federal rate provided
for in Section 1274(d) of the Code for the period commencing on the date of the
Overpayment to the date of such payment by the Executive to the
Company. The Executive shall make such payment to the Company as soon
as administratively practicable after the Company notifies the Executive of (A)
the Accounting Firm’s determination that an Overpayment was made and (B) the
amount to be repaid.
(v) Nothing in
this Section 7(h) is intended to violate the Xxxxxxxx-Xxxxx Act of 2002, as
amended, and to the extent that any advance or repayment obligation hereunder
would constitute such a violation, such obligation shall be modified so as to
make the advance a nonrefundable payment to the Executive and the repayment
obligation null and void to the extent required by such Act.
8. Non-Competition.
(a) Executive
acknowledges and recognizes the highly competitive nature of the businesses of
the Company and its affiliates and accordingly agrees that: during
the period of Executive’s employment with the Company and, in the event of
Executive’s termination of employment pursuant to Section 7(a), Section 7(c) or
Section 7(d), one year thereafter (“Restricted
Period”):
(i) Executive
will not become an employee, owner (except for passive investments of not more
than one percent of the outstanding shares of, or any other equity interest in,
any company or entity listed or traded
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on a
national securities exchange or in an over-the-counter securities market),
officer, agent or director of any independent power producing company in the
United States. Notwithstanding any provision of this Agreement to the
contrary, if Executive is employed by the Company, any breach of the provisions
of this Section 8(a) shall permit the Company to terminate the employment of
Executive for Cause; and
(ii) Executive
will not induce any employee of the Company or its affiliates to terminate his
or her employment with the Company or its affiliates, or solicit for hire or
employment or assist in the hiring or employment of any such employee by any
person, association, or entity not affiliated with the Company unless such
person shall have ceased to be employed by the Company or any of its affiliates
for a period of at least 12 months; provided, however, that this
Section 8(a)(ii) shall not apply to any solicitation (or hiring or employment as
a result of any solicitation) that consists of advertising in a newspaper or
periodical of general circulation or through the Internet.
(iii) Whether or
not Executive is employed by the Company, from and after any breach by Executive
of the provisions of this Section 8(a), the Company shall cease to have any
obligations to make payments to Executive under this Agreement, and any vested
or unvested stock options previously granted to Executive, including, without
limitation, any options that were otherwise considered nonforfeitable under
Section 7(c) or (d), shall be immediately forfeited.
(b) It is
expressly understood and agreed that although Executive and the Company consider
the restrictions contained in Section 8(a) to be reasonable, if a final judicial
determination is made by a court of competent jurisdiction that the time or
territory or any other restriction contained in this Agreement is an
unenforceable restriction against Executive, the provisions of this Agreement
shall not be rendered void but shall be deemed amended to apply as to such
maximum time and territory and to such maximum extent as such court may
judicially determine or indicate to be enforceable. Alternatively, if
any court of competent jurisdiction finds that any restriction contained in this
Agreement is unenforceable, and such restriction cannot be amended so as to make
it enforceable, such finding shall not affect the enforceability of any of the
other restrictions contained herein.
9. Confidentiality. Executive
will not at any time (whether during or within two years after Executive’s
employment with the Company) disclose or use for Executive’s own benefit or
purposes or the benefit or purposes of any other person, firm, partnership,
joint venture, association, corporation or other business organization, entity
or enterprise other than the Company and any of its subsidiaries or affiliates,
any trade secrets, information, data, or other confidential information relating
to customers, development programs, costs, marketing,
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trading,
investment, sales activities, promotion, business planning, credit and financial
data, manufacturing processes, financing methods, plans, or the business and
affairs of the Company generally, or of any subsidiary or affiliate of the
Company, provided that
the foregoing shall not apply to (a) confidential information which is or
becomes a part of the public domain or is available to the public by publication
or otherwise without disclosure by Executive; (b) confidential information
which, either prior or subsequent to the Company’s disclosure to Executive, was
disclosed to Executive, without an obligation of confidentiality, by a third
party who did not acquire such information, directly or indirectly from
Executive, the Company, or from any third party who is under an obligation of
confidentiality; or (c) any disclosure of confidential information by Executive
which is required by law, including deposition or trial testimony by Executive
pursuant to subpoena. If Executive is requested or required (by oral
questions, interrogatories, requests for information or documents, subpoena,
civil investigative demand, or similar process) to disclose any confidential
information, Executive will promptly notify the Company of such request or
requirements so that the Company may seek an appropriate protective order or
waive compliance with the provisions of this Agreement. Executive
agrees that upon termination of Executive’s employment with the Company for any
reason, Executive will return to the Company immediately all memoranda, books,
papers, plans, information, letters and other data, and all copies thereof or
therefrom, in any way relating to the business of the Company and its
affiliates, except that Executive may retain personal notes, notebooks and
diaries. Executive further agrees that Executive will not retain or
use for Executive’s account at any time any trade names, trademark or other
proprietary business designation used or owned in connection with the business
of the Company or its affiliates.
10. Specific
Performance. Executive acknowledges and agrees that the
Company’s remedies at law for a breach or threatened breach of any of the
provisions of Section 8 or Section 9 would be inadequate and, in recognition of
this fact, Executive agrees that, in the event of such a breach or threatened
breach, in addition to any remedies at law, the Company, without posting any
bond, shall be entitled to obtain equitable relief in the form of specific
performance, temporary restraining order, temporary or permanent injunction or
any other equitable remedy which may then be available.
11. Miscellaneous.
(a) Governing Law; No Liability of
Executive. This Agreement shall be governed by and construed
in accordance with the laws of the State of Pennsylvania. Executive
shall not be subject to liability for breach of this Agreement by reason of
Executive’s termination of employment hereunder.
(b) Entire
Agreement/Amendments/Termination.
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(i) This
Agreement contains the entire understanding of the parties with respect to the
employment of Executive by the Company and supersedes all prior agreements and
understanding, written or oral, including, without limitation any and all
employment agreements or arrangements with CEH. There are no
restrictions, agreements, promises, warranties, covenants or undertakings
between the parties with respect to the subject matter herein other than those
expressly set forth herein. This Agreement may not be altered,
modified, or amended except by written instrument signed by the parties
hereto.
(ii) In the
event the Merger is not consummated prior to the Termination Date, or the Merger
Agreement is otherwise terminated by the parties thereto pursuant to the terms
thereof, this Agreement shall immediately terminate and be of no force or
effect.
(c) No Waiver. The
failure of a party to insist upon strict adherence to any term of this Agreement
on any occasion shall not be considered a waiver of such party’s rights or
deprive such party of the right thereafter to insist upon strict adherence to
that term or any other term of this Agreement.
(d) Severability. In
the event that any one or more of the provisions of this Agreement shall be or
become invalid, illegal or unenforceable in any respect, the validity, legality
and enforceability of the remaining provisions of this Agreement shall not be
affected thereby.
(e) Assignment. This
Agreement shall not be assignable by Executive.
(f) No
Mitigation. Executive shall not be required to mitigate the
amount of any payment provided for pursuant to this Agreement by seeking other
employment.
(g) Successors; Binding
Agreement. This Agreement shall inure to the benefit of and be
binding upon personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees.
(h) Notice. For the
purpose of this Agreement, notices and all other communications provided for in
the Agreement shall be in writing and shall be deemed to have been duly given
when delivered or mailed by United States registered mail, return receipt
requested, postage prepaid, addressed to the respective addresses set forth on
the execution page of this Agreement, provided that all notices to
the Company shall be directed to the attention of the Board with a copy to the
Secretary of the Company, or to such other address as either party may have
furnished to the other in writing in accordance herewith, except that notice of
change of address shall be effective only upon receipt.
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(i) Withholding
Taxes. The Company may withhold from any amounts payable under
this Agreement such Federal, state and local taxes as may be required to be
withheld pursuant to any applicable law or regulation.
(j) Counterparts;
Effectiveness. This Agreement may be signed in counterparts,
each of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument. This Agreement
shall become effective when each party hereto shall have received a counterpart
hereof signed by the other party hereto.
12. Defined
Terms.
“Accounting Firm” has the
meaning set forth in Section 7.
“Accrued Compensation” has the
meaning set forth in Section 7.
“Agreement” has the meaning set
forth in the introductory paragraph.
“Base Salary” has the meaning
set forth in Section 3.
“Board” means the Board of
Directors of GSCAC.
“Bonus” has the meaning set
forth in Section 4.
“Cause” means Executive: (i)
has engaged in gross negligence or willful misconduct in the performance of the
duties required of Executive hereunder, (ii) has committed a felony, as
reasonably determined by the Board in good faith, (iii) has willfully refused,
within 5 business days following written notice by the Company, and without
proper legal reason to materially perform the duties and responsibilities
required of Executive hereunder, (iv) has materially breached any material
corporate policy maintained and established by the Company that is of general
applicability to Company’s executive employees which, if correctable, remains
uncorrected for 5 business days following written notice to Executive by the
Company of such breach, (v) has willfully engaged in conduct that Executive
knows or should know is materially injurious to the Company or any of its
affiliates, (vi) is engaging in the illegal use of controlled substances, or
(vii) has materially breached any material provision of this Agreement which is
uncorrectable or, if correctable, remains uncorrected for 5 business days
following written notice to Executive by the Company of such
breach.
“Code” means the Internal
Revenue Code of 1986, as amended, and the regulations promulgated
thereunder.
“Disability” has the meaning
set forth in Section 7.
“Employment Term” has the
meaning set forth in Section 1.
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“Excise Tax” has the meaning
set forth in Section 7.
“Executive” has the meaning set
forth in the introductory paragraph.
“Good Reason Event”
means: (i) a material breach by the Company of any material provision
of this Agreement (provided, however, that a reduction in Executive’s annual
base salary that is consistent with reductions taken generally by other
executives of the Company shall not be considered a material breach of a
material provision of this Agreement); (ii) a material diminution in the nature
or scope of Executive’s duties and responsibilities, including the Company’s
failure to use reasonable efforts to secure Executive’s election (or reelection)
to the Board (for clarity, if the Company uses such reasonable efforts, the
Executive ceasing to be a member of the Board shall not be considered a Good
Reason Event); (iii) the assignment to Executive of duties and responsibilities
that are materially inconsistent with the positions referred to in Section 2(a)
and that result in a material negative change to Executive; or (iv) any material
change in the geographic location at which Executive must perform services;
provided, however, that
business travel reasonably required for the performance of Executive’s duties
hereunder shall not constitute a Good Reason Event.
“Gross-Up Payment” has the
meaning set forth in Section 7.
“Merger and Merger Agreement”
have the meanings set forth in the recitals.
“Notice of Termination” means a
written notice which shall indicate the specific termination provision in this
Agreement relied upon and shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of employment under the
provision so indicated.
“Overpayment” has the meaning
set forth in Section 7.
“Payment” has the meaning set
forth in Section 7.
“Pro-Rata Bonus Amount” means a
cash amount determined by multiplying Executive’s target Bonus, if any, for the
year in which a termination of employment occurs by a fraction, the numerator of
which is the elapsed number of days in such year through such termination date,
and the denominator of which is 365.
“Restricted Period” has the
meaning set forth in Section 8.
“Termination Date” has the
meaning set forth in Section 9.01 of the Merger Agreement.
“Underpayment” has the meaning
set forth in Section 7.
13
IN WITNESS
WHEREOF, the parties hereto have duly executed this Agreement as of the day and
year first above written.
|
XXXX
X. XXXXXX
|
|
| /s/ Xxxx X. Xxxxxx | |
|
Address
for Notices:
Complete Energy Holdings, LLC 000 Xxxxxxx Xxxx Xxxxx, Xxxxx 0000 Xxxxxxxxxx, Xxxxxxxxxxxx 00000 Facsimile No.: (000) 000-0000 |
|
CEP
OPERATING COMPANY LLC
|
||
|
By:
|
/s/ Xxxx Xxxxxx | |
|
Title:
Authorized Officer
|
||
|
Complete
Energy Holdings, LLC
0000 Xxxxx Xx., Xxxxx 000 Xxxxxxx, Xxxxx 00000 |
||
|
GSC
ACQUISITION COMPANY
|
||
|
By:
|
/s/ Xxxxxxx Xxxxxxx | |
|
Name:
Xxxxxxx Xxxxxxx
|
||
|
Title:
President
GSCAC Acquisition Company 000 Xxxxxx Xxxxx, Xxxxx 000 Xxxxxxx Xxxx, Xxx Xxxxxx 00000 Facsimile: (000) 000-0000 |
||
14
