EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT made and entered into as of the 24th day of
October, 1994, by and among Cinergy Corp., a Delaware Corporation
("Cinergy"), Cinergy Services, Inc., a Delaware Corporation
("Cinergy Services"), The Cincinnati Gas & Electric Company, an
Ohio Corporation ("CG&E"), PSI Energy, Inc., an Indiana
Corporation ("PSI"), and Xxxxx X. Xxxxxx (the "Executive").
Cinergy, Cinergy Services, CG&E, and PSI will sometimes be
referred to in this Employment Agreement collectively as the
"Corporation".
WHEREAS, the Corporation desires that the Executive become an
employee in accordance with this Employment Agreement;
WHEREAS, the Executive is willing to commit himself to the employ
of the Corporation and any successor thereto, on the terms and
conditions set forth in this Employment Agreement and thus to
forego opportunities elsewhere; and
WHEREAS, the parties desire to enter into this Employment
Agreement as of the date first set forth above setting forth the
terms and conditions for the employment relationship of the
Executive;
NOW, THEREFORE, IN CONSIDERATION of the mutual premises,
covenants and agreements set forth below, it is hereby agreed as
follows:
1. Employment and Term.
a. The Corporation agrees to employ the Executive,
and the Executive agrees to be employed, in accordance
with the terms and provisions of this Employment
Agreement for the period set forth below (the
"Employment Period").
b. The Employment Period of the Executive as provided
in Section 1(a) will commence on October 24, 1994 (the
"Effective Date") and shall continue until December 31,
1997; provided, however, commencing on January 1, 1996,
and each January 1 thereafter (the "Renewal Date"), the
Employment Period of this Employment Agreement may
automatically be extended for one (1) additional year
if the Corporation shall have given notice to the
Executive of its intent to extend this Employment
Agreement prior to such Renewal Date and the Executive
shall not have objected to such extension in writing
within ten (10) business days of receipt of such
notice.
2. Duties and Powers of Executive.
a. Position. The Executive shall serve the
Corporation in such responsible executive capacity or
capacities as the Board of Directors of Cinergy or
Cinergy Services (the Board of Directors of Cinergy or
Cinergy Services, as the case may be, may be referred
to sometimes as the "Board") or the Chief Executive
Officer of Cinergy or the Chief Operating Officer of
Cinergy may from time to time determine and shall have
such responsibilities, duties and authority as may be
assigned to him from time to time during the Employment
Period by the Board or the Chief Executive Officer of
Cinergy or the Chief Operating Officer of Cinergy that
are consistent with such responsibilities, duties and
authority. Upon the Effective Date of this Employment
Agreement, the Executive shall initially serve as Group
Vice President, Reengineering and Operation Services
for the Corporation, but consistent with the foregoing
provisions of this Section 2(a), may be assigned to any
other position or positions by either the Board or the
Chief Executive Officer of Cinergy or the Chief
Operating Officer of Cinergy during the Employment
Period.
b. Place of Performance. In connection with the
Executive's employment, the Executive shall be based at
the principal executive offices of the Corporation, 000
Xxxx Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxx, and, except for
required business travel to an extent substantially
consistent with the present business travel obligations
of executives of the Corporation who have positions of
authority comparable to that of the Executive, the
Executive shall not be required to relocate to a new
principal place of business which is more that thirty
(30) miles from the current principal place of business
of the Corporation.
3. Compensation. The Executive shall receive the
following compensation for his services under this
Employment Agreement.
a. Salary. The Executive's annual base salary (the
"Annual Base Salary"), payable not less often than
semi-monthly, shall be at the annual rate of not less
than $240,000.00. The Board may, from time to time,
direct such upward adjustments in the Annual Base
Salary as the Board deems to be necessary or desirable,
including without limitation adjustments in order to
reflect increases in the cost of living. Any increase
in the Annual Base Salary shall not serve to limit or
reduce any other obligation of the Corporation under
this Employment Agreement. The Annual Base Salary
shall not be reduced after any increase thereof except
for across-the-board salary reductions similarly
affecting all management personnel of Cinergy, Cinergy
Services, PSI or CG&E.
b. Retirement, Incentive, Welfare Benefit Plans and
Other Benefits. During the Employment Period and so
long as the Executive is employed by the Corporation,
the Executive shall be eligible, and the Corporation
shall take such actions as may be necessary or required
to cause the Executive to become eligible, to
participate in all short-term and long-term incentive,
stock option, restricted stock, performance unit,
savings, retirement and welfare plans, practices,
policies and programs applicable generally to employees
and/or other senior executives of the Corporation,
including but not limited to Cinergy's Annual Incentive
Plan, Cinergy's Performance Shares Plan, Cinergy's
Executive Supplemental Life Insurance Program,
Cinergy's Stock Option Plan, PSI's Pension Plan and
PSI's Excess Benefit Plan, or any successors thereto,
except with respect to any plan, practice, policy or
program to which the Executive has waived his rights in
writing.
c. Fringe Benefits and Perquisites. During the
Employment Period and so long as the Executive is
employed by the Corporation, the Executive shall be
entitled to the following additional fringe benefits:
(i) The Corporation shall furnish to the
Executive an automobile and shall pay all of the
related expenses for gasoline, insurance,
maintenance and repairs,
(ii) The Corporation shall pay the initiation fee
and the annual dues, assessments and other
membership charges of the Executive for membership
charges of the Executive for membership in a
country club selected by the Executive,
(iii) The Corporation shall provide paid
vacation for four (4) weeks per year (or longer if
permitted by the Corporation's policy), and
(iv) The Corporation shall furnish to the
Executive annual financial planning and tax
preparation services. In addition, the Executive
shall be entitled to receive such other fringe
benefits in accordance with the plans, practices,
programs and policies of the Corporation from time
to time in effect, commensurate with his position
and at least comparable to those received by other
senior executives of the Corporation.
d. Expenses. The Corporation agrees to reimburse the
Executive for all expenses, including those for travel
and entertainment, properly incurred by him in the
performance of his duties under this Employment
Agreement in accordance with the policies established
from time to time by the Board.
e. Relocation Benefits. The Executive shall be
entitled to reimbursement from the Corporation pursuant
to the terms of the Corporation Relocation Program in
effect as of the day and year first written above, as
well as all actual expenses for temporary housing until
such time as he has moved into a new primary residence
in the general area of the Corporation's principal
corporate office located in Cincinnati, Ohio. The
expenses described in this Section shall be "grossed
up" to provide for adverse tax consequences to the
Executive.
4. Termination of Employment.
a. Death. The Executive's employment shall terminate
automatically upon the Executive's death during the
Employment Period.
b. By the Corporation for Cause. The Corporation may
terminate the Executive's employment during the
Employment Period for Cause. For purposes of this
Employment Agreement, "Cause" shall mean:
(i) The willful and continued failure by the
Executive to substantially perform the Executive's
duties with the Corporation (other than any such
failure resulting from Executive's incapacity due
to physical or mental illness or any such actual
or anticipated failure after the issuance of a
Notice of Termination for Good Reason by the
Executive pursuant to Section 4(c) after a written
demand for substantial performance is delivered to
the Executive by the Board, which demand
specifically identifies the manner in which the
Board believes that the Executive has not
substantially performed the Executive's duties, or
(ii) The breach by the Executive of the
confidentiality provisions set forth in Section 8
of this Employment Agreement, or
(iii) The conviction of the Executive for the
commission of a felony, including the entry of a
guilty or nolo contendere plea, or any willful or
grossly negligent action or inaction by the
Executive that has a materially adverse effect on
the Corporation. For purposes of this definition
of "Cause", no act, or failure to act, on the
Executive's part shall be deemed "willful" unless
done, or omitted to be done, by the Executive not
in good faith and without reasonable belief that
the Executive's act, or failure to act, was in the
best interest of the Corporation. Notwithstanding
the above definition of "Cause", the Corporation
may terminate the Executive's employment during
the Employment Period for a reason other than
Cause, but the obligations placed upon the
Corporation in Section 5 shall apply.
c. By the Executive for Good Reason. The Executive
may terminate his employment during the Employment
Period for Good Reason. For purposes of this
Employment Agreement, "Good Reason" shall mean:
(i) The reduction in the Executive's Annual Base
Salary as specified in Section 3(a) of this
Employment Agreement, or any other benefit or
payment described in Section 3 of this Employment
Agreement, except for across-the-board salary
reductions similarly affecting all management
personnel of Cinergy, Cinergy Services, CG&E, and
PSI, and changes to the employee benefits programs
affecting all management personnel of those
Corporations, provided that such changes (either
individually or in the aggregate) will not result
in a material adverse change with respect to the
benefits which the Executive was entitled to
receive as of the Effective Date;
(ii) The material reduction without his consent of
the Executive's title, authority, duties or
responsibilities from those in effect immediately
prior to the reduction;
(iii) Any breach by the Corporation of any
other material provision (including but not
limited to the place of performance as specified
in Section 2(b);
(iv) The Executive's disability due to physical or
mental illness or injury which precludes the
Executive from performing any job for which he is
qualified and able to perform based upon his
education, training or experience; or
(v) Any event which constitutes a "Change in
Control" as defined in Section 4(f) of this
Employment Agreement.
d. Notice of Termination. Any termination by the
Corporation for cause, or by the Executive for Good
Reason, shall be communicated by Notice of Termination
to the other party to this Employment Agreement given
in accordance with Section 10(b) of this Employment
Agreement. For purposes of this Employment Agreement,
a "Notice of Termination" means a written notice which:
(i) Indicates the specific termination provision
in this Employment Agreement relied upon,
(ii) To the extent applicable, sets forth in
reasonable detail the facts and circumstances
claimed to provide a basis for termination of the
Executive's employment under the provision so
indicated, and
(iii) If the Date of Termination (as defined
in Section 4(e)) is other than the date of receipt
of such notice, specifies the termination date
(which date shall be not more than thirty (30)
days after the giving of such notice). The
failure by the Executive or the Corporation to set
forth in the Notice of Termination any fact or
circumstances which contributes to a showing of
Good Reason or Cause shall not waive any right of
the Executive or the Corporation under this
Employment Agreement or preclude the Executive or
the Corporation from asserting such fact or
circumstances in enforcing the Executive's or the
Corporation's rights under this Employment
Agreement.
e. Date of Termination. "Date of Termination" means:
(i) If the Executive's employment is terminated
by the Corporation for Cause, or by the Executive
for Good Reason, the date of receipt of the Notice
of Termination or any later date specified
therein, as the case may be,
(ii) If the Executive's employment is terminated
by the Corporation other than for Cause, the date
on which the Corporation notifies the Executive of
such termination, and
(iii) If the Executive's employment is
terminated by reason of death, the date of death.
f. Change in Control. A "Change in Control" shall be
deemed to have occurred if any of the following events
occur after the Effective Date:
(i) Any corporation, person, other entity or
group becomes the "beneficial owner" (as defined
in Rule 13d-3 under the Securities Exchange Act of
1934) of more than fifty percent (50%) of the then
outstanding voting stock of Cinergy otherwise than
through a transaction arranged by, or consummated
with, the prior approval of the Board;
(ii) The shareholders of Cinergy approve a
definite agreement to merge or consolidate with or
into another corporation in a transaction in which
neither Cinergy nor any of its subsidiaries or
affiliates will be the surviving corporation, or
to sell or otherwise dispose of all or
substantially all of Cinergy's assets to any
person or group other than Cinergy or any of its
subsidiaries or affiliates, other than a merge or
a sale which will result in the voting securities
of Cinergy outstanding prior to the merger or sale
continuing to represent at least fifty percent
(50%) of the combined voting power of the voting
securities of the corporation surviving the merger
or purchasing the assets; or
(iii) During any period of two (2) consecutive
years, individuals who at the beginning of such
period constitute the Board of Directors of
Cinergy (and any new director whose election by
the Board of Directors of Cinergy or whose
nomination for election by Cinergy's stockholders
was approved by a vote of at least two thirds
(2/3) of the directors then still in office who
either were directors at the beginning of such
period or whose election or nomination for
election was previously so approved) cease for any
reason to constitute a majority of Cinergy's Board
of Directors.
g. Person. "Person" shall have the meaning given in
Section 3(a)(9) of the Securities Exchange Act of 1934,
as modified and used in Sections 13(d) and 14(d)
thereof; however, a Person shall not include:
(i) The Corporation or any of its subsidiaries,
(ii) A trustee or other fiduciary holding
securities under an employee benefit plan of
Cinergy or any of its subsidiaries,
(iii) An underwriter temporarily holding
securities pursuant to an offering of such
securities, or
(iv) A corporation owned, directly or indirectly,
by the stockholders of Cinergy in substantially
the same proportions as their ownership of stock
of the Corporation.
5. Obligations of the Corporation Upon Termination.
a. Certain Terminations. During the Employment
Period, if the Corporation shall terminate the
Executive's employment (other than in the case of a
termination for Cause), the Executive shall terminate
his employment for Good Reason or the Executive's
employment shall terminate by reason of death
(termination in any such case referred to as
"Termination"):
(i) The Corporation shall pay to the Executive a
lump sum amount, in case, equal to the sum of:
(1) the Executive's Annual Base Salary
through the Date of Termination to the extent
not previously paid,
(2) an amount equal to the Cinergy Annual
Incentive Plan target percentage benefit for
the fiscal year that includes the Date of
Termination multiplied by a fraction the
numerator of which shall be the number of
days from the beginning of such fiscal year
to and including the Date of Termination and
the denominator of which shall be three
hundred and sixty-five (365),
(3) an amount equal to his vested accrued
benefit under the Cinergy Performance Shares
Plan, and
(4) any compensation previously deferred by
the Executive (together with any accrued
interest or earnings thereon) and any accrued
vacation pay, in each case to the extent not
previously paid.
(The amounts specified in clauses (1), (2),
(3) and (4) shall be referred to in this
Employment Agreement as the "Accrued
Obligations".) The amounts specified in this
Section 5(a)(i) shall be paid within thirty
(30) days after the Date of Termination. The
Accrued Obligations described in this Section
are payable to the Executive regardless of
whether a Change in Control has occurred.
(ii) Prior to the occurrence of a Change in
Control, and in the event of Termination other
than by reason of the Executive's death, then:
(1) the Corporation shall pay to the
Executive a lump sum amount, in cash, equal
to the present value discounted using an
interest rate equal to the prime rate
promulgated by CitiBank, N.A. and in effect
as of the Date of Termination (the "Prime
Rate") of the Annual Base Salary, and the
Cinergy Annual Incentive Plan target
percentage payable through the end of the
Employment Period, each at the rate, and
using the same goals and factors, in effect
at the time Notice of Termination is given,
and paid within thirty (30) days of the Date
of Termination;
(2) the Corporation shall pay to the
Executive the present value (discounted at
the Prime Rate) of all amounts to which the
Executive would have been entitled had he
remained in employment with the Corporation
until the end of the Employment Period, each,
where applicable, at the rate of the Annual
Base Salary, and using the same goals and
factors, in effect at the time Notice of
Termination is given, under the Cinergy
Performance Shares Plan and the Cinergy
Executive Supplemental Life Insurance Program
minus the present value (discounted at the
Prime Rate) of the benefits to which he is
actually entitled under the above mentioned
plans and programs;
(3) the Corporation shall pay the value of
all deferred compensation amounts and all
executive life insurance benefits whether or
not then vested or payable; and
(4) the Corporation shall continue, until
the end of the Employment Period, medical and
welfare benefits to the Executive and/or the
Executive's family at least equal to those
which would have been provided if the
Executive's employment had not been
terminated (excluding benefits to which the
Executive has waived his rights in writing),
such benefits to be in accordance with the
most favorable medical and welfare benefit
plans, practices, programs or policies (the
"M&W Plans") of the Corporation as in effect
and applicable generally to other senior
executives of the Corporation and their
families during the ninety (90) day period
immediately preceding the Date of
Termination; provided, however, that if the
Executive becomes employed with another
employer and is eligible to receive medical
or other welfare benefits under another
employer-provided plan, the benefits under
the M&W Plans shall be secondary to those
provided under such other plan during such
applicable period of eligibility.
(iii) From and after the occurrence of a
Change in Control and in the event of Termination
other than by reason of the Executive's death,
then in lieu of any further salary payments to the
Executive for periods subsequent to the Date of
Termination and in lieu of any other benefits
payable pursuant to Section 5(a)(ii) of this
Employment Agreement:
(1) The Corporation shall pay to the
Executive a lump sum severance payment, in
cash, equal to the greater of:
(A) the present value of all amounts
and benefits that would have been due
under Sections 5(a)(ii) of this
Employment Agreement, excluding Section
5(a)(ii)(4), and
(B) three (3) times the sum of (x) the
higher of the Executive's Annual Base
Salary in effect immediately prior to
the occurrence of the event or
circumstance upon which the Notice of
Termination is based or in effect
immediately prior to the Change in
Control, and (y) the higher of the
amount paid to the Executive pursuant to
all incentive compensation or bonus
plans or programs maintained by the
Corporation, in the year preceding that
in which the Date of Termination occurs
or in the year preceding that in which
the Change in Control occurs; and
(2) For a thirty-six (36) month period after
the Date of Termination, the Corporation
shall arrange to provide the Executive with
life, disability, accident and health
insurance benefits substantially similar to
those which the Executive is receiving
immediately prior to the Notice of
Termination (without giving effect to any
reduction in such benefits subsequent to a
Change in Control which reduction constitutes
Good Reason), except for any benefits that
were waived by the Executive in writing.
Benefits otherwise receivable by the
Executive pursuant to this Section
5(a)(iii)(2) shall be reduced to the extent
comparable benefits are actually received by
or made available to the Executive without
cost during the thirty-six (36) month period
following the Executive's termination of
employment (and any such benefits actually
received by the Executive shall be reported
to the Corporation by the Executive).
The Executive's employment shall be deemed to
have been terminated following a Change in
Control of Cinergy without Cause or by the
Executive for Good Reason if, in addition to
all other applicable Terminations, the
Executive's employment is terminated prior to
a Change in Control without Cause at the
direction of a Person who has entered into an
agreement with Cinergy or any of its
subsidiaries or affiliates, the consummation
of which will constitute a Change in Control
or if the Executive terminates his employment
for Good Reason prior to a Change in Control
if the circumstances or event which
constitutes Good Reason occurs at the
direction of such Person.
b. Termination by the Corporation for Cause or by the
Executive Other Than for Good Reason. Subject to the
provisions of Section 7 of this Employment Agreement,
if the Executive's employment shall be terminated for
Cause during the Employment Period, or if the Executive
terminates employment during the Employment Period
other than a termination for Good Reason, the
Corporation shall have no further obligations to the
Executive under this Employment Agreement other than
the obligation to pay to the Executive the Accrued
Obligations and the amounts determined under Section
5(c), plus any other earned but unpaid compensation, in
each case to the extent not previously paid.
c. Retirement Benefits on Termination. In addition
to retirement benefits under PSI's Pension Plan and
PSI's Excess Benefit Plan, or any successors thereto,
the Executive shall also be eligible to participate in
any supplemental executive retirement plan (commonly
referred to as a "SERP") sponsored by the Corporation.
d. Survival of Section 5(c). The provisions of
Section 5(c) shall survive the expiration or
termination of this Employment Agreement for any
reason.
e. Certain Tax Consequences. In the event that the
Executive becomes entitled to the payments and benefits
described in this Section 5 (the "Severance Benefits"),
if any of the Severance Benefits will be subject to any
excise tax (the "Excise Tax") imposed under Section
4999 of the Internal Revenue Code of 1986, as amended
(the "Code"), the Corporation shall pay to the
Executive an additional amount (the "Gross-Up Payment")
such that the net amount retained by the Executive,
after deduction of an Excise Tax on the Severance
Benefits and any federal, state and local income and
employment tax and Excise Tax upon the payment provided
for by this Section 5, shall be equal to the Severance
Benefits. For purposes of determining whether any of
the Severance Benefits will be subject to the Excise
Tax and the amount of such Excise Tax,
(i) any other payments or benefits received or to
be received by the Executive in connection with a
Change in Control or the Executive's termination
of employment (whether pursuant to the terms of
this Employment Agreement or any other plan,
arrangement or agreement with the Corporation, any
Person whose actions result in a Change in Control
or any Person affiliated with the Corporation or
such Person) shall be treated as "parachute
payments" within the meaning of Section 280G(b)(2)
of the Code, and all "excess parachute payments"
within the meaning of Section 280G(b)(1) of the
Code shall be treated as subject to the Excise
Tax, unless in the opinion of tax counsel selected
by the Corporation's independent auditors and
reasonably acceptable to the Executive such other
payments or benefits (in whole or in part) do not
constitute parachute payments, including by reason
of Section 280G(b)(4)(A) of the Code, or such
excess parachute payments (in whole or in part)
represent reasonable compensation for services
actually rendered, within the meaning of Section
280G(b)(4)(B) of the Code, in excess of the Base
Amount as defined in Section 280G(b)(3) of the
Code allocable to such reasonable compensation, or
are otherwise not subject to the Excise Tax,
(ii) the amount of the Severance Benefits that
shall be treated as subject to the Excise Tax
shall be equal to the lesser of
(1) the total amount of the Severance
Benefits, or
(2) the amount of excess parachute payments
within the meaning of Section 280G(b)(1) of
the Code (after applying clause (i), above),
and
(iii) the value of any non-cash benefits or
any deferred payment or benefit shall be
determined by the Corporation's independent
auditors in accordance with the principles of
Section 280G(d)(3) and (4) of the Code. For
purposes of determining the amount of the Gross-Up
Payment, the Executive shall be deemed to pay
federal income taxes 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 of Termination,
net of the maximum reduction in federal income
taxes which would 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 at
the time of termination of the Executive's
employment, the Executive shall repay to the
Corporation, 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 and employment 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 or employment 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 at the time of the
termination of the Executive's employment
(including by reason of any payment the existence
or amount of which cannot be determined at the
time of the Gross-Up Payment), the Corporation
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 Corporation 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 Severance
Benefits.
f. Other Fees and Expenses. The Corporation also
shall pay to the Executive all legal fees and expenses
incurred by the Executive as a result of a termination
which entitles the Executive to the Severance Benefits
(including all such fees and expenses, if any, incurred
in disputing any such termination or in seeking in good
faith to obtain or enforce any benefit or right
provided by this Employment Agreement). Such payments
shall be made within five (5) business days after
delivery of the Executive's written requests for
payment accompanied with such evidence of fees and
expenses incurred as the Corporation reasonably may
require.
6. Non-exclusivity of Rights. Nothing in this Employment
Agreement shall prevent or limit the Executive's continuing
or future participation in any benefit, plan, program,
policy or practice provided by the Corporation and for which
the Executive may qualify (except with respect to any
benefit to which the Executive has waived his rights in
writing), nor shall anything herein limit or otherwise
affect such rights as the Executive may have under any other
contract or agreement entered into after the date hereof
with the Corporation. Amounts which are vested benefits or
which the Executive is otherwise entitled to receive under
any benefit, plan, program, policy or practice of, or any
contract or agreement entered into after the date hereof
with, the Corporation at or subsequent to the Date of
Termination, shall be payable in accordance with such
benefit, plan, program, policy or practice, or contract or
agreement, except as explicitly modified by this Employment
Agreement.
7. Full Settlement: Mitigation. Except as provided in
Sections 5(a)(ii)(4) and 5(a)(iii)(2) of this Employment
Agreement, the Corporation's obligation to make the payments
provided for in this Employment Agreement and otherwise to
perform its obligations under this Employment Agreement
shall not be affected by any set-off, counterclaim,
recoupment, defense or other claim, right or action which
the Corporation may have against the Executive or others.
In no event shall the Executive be obligated to seek other
employment or take any other action by way of mitigation of
the amounts (including amounts for damages for breach)
payable to the Executive under any of the provisions of this
Employment Agreement and such amounts shall not be reduced
whether or not the Executive obtains other employment. If
the Executive finally prevails with respect to any dispute
between the Corporation, the Executive or others as to the
interpretation, terms, validity or enforceability of
(including any dispute about the amount of any payment
pursuant to) this Employment Agreement, the Corporation
agrees to pay all legal fees and expenses which the
Executive may reasonably incur as a result of any such
dispute.
8. Confidential Information. The Executive shall hold in
a fiduciary capacity for the benefit of Cinergy, all of its
subsidiary companies and affiliates, as well as all
successors and assigns thereof (the "Cinergy Companies"),
all secret, confidential information, knowledge or data
relating to the Cinergy Companies, and their respective
businesses, that shall have been obtained by the Executive
during the Executive's employment by the Corporation and
that shall not have been or now or subsequently have become
public knowledge (other than by acts by the Executive or
representatives of the Executive in violation of this
Employment Agreement). During the Employment Period and
thereafter, the Executive shall not, without the prior
written consent of the Corporation or as may otherwise by
required by law or legal process, communicate or divulge any
such information, knowledge or data to anyone other than the
Corporation and those designated by it. The Executive
understands that during the Employment Period, the Cinergy
Companies may be required from time to time to make public
disclosure of the terms or existence of the Executive's
employment relationship in order to comply with various laws
and legal requirements. In addition to all other remedies
available to the Corporation in law and equity, this
Employment Agreement is subject to termination by the
Corporation for Cause under Section 4(b) in the event the
Executive violates any provision of this Section 8.
9. Successors.
a. This Employment Agreement is personal to the
Executive and, without the prior written consent of the
Corporation, shall not be assignable by the Executive
otherwise than by will or the laws of descent and
distribution. This Employment Agreement shall insure
to the benefits of and be enforceable by the
Executive's legal representatives.
b. This Employment Agreement shall inure to the
benefit of and be binding upon the Corporation, and its
successors and assigns.
c. The Corporation shall require any successor
(whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all
of the business and/or assets of the Corporation to
assume expressly and agree to perform this Employment
Agreement in the same manner and to the same extent
that the Corporation would be required to perform it if
no such succession had taken place.
10. Miscellaneous.
a. This Employment Agreement shall be governed by and
construed in accordance with the laws of the State of
Ohio, without reference to principles of conflict of
laws. The captions of this Employment Agreement are
not part of the provisions hereof and shall have no
force or effect. This Employment Agreement may not be
amended, modified, repealed, waived, extended or
discharged except by an agreement in writing signed by
the party against whom enforcement of such amendment,
modification, repeal, waiver, extension or discharge is
sought. No person, other than pursuant to a resolution
of the Board or a committee thereof, shall have
authority on behalf of the Corporation to agree to
amend, modify, repeal, waive, extend or discharge any
provision of this Employment Agreement or anything in
reference thereto.
b. All notices and other communications hereunder
shall be in writing and shall be given by hand delivery
to the other party or by registered or certified mail,
return receipt requested, postage prepaid, addressed as
follows:
If to the Executive:
Xxxxx X. Xxxxxx
Cinergy Corp.
000 Xxxx Xxxxxx Xxxxxx
X. X. Xxx 000
Xxxxxxxxxx, Xxxx 00000-0000
If to the Corporation:
Cinergy Corp.
000 Xxxx Xxxxxx Xxxxxx
P. O. Xxx 000
Xxxxxxxxxx, Xxxx 00000-0000
Attn: Vice President, General Counsel and
Corporate Secretary
or to such other address as either party shall have
furnished to the other in writing in accordance with
this Employment Agreement. All notices and
communications shall be effective when actually
received by the addressee.
c. The invalidity or unenforceability of any
provision of this Employment Agreement shall not affect
the validity or enforceability of any other provision
of this Employment Agreement.
d. The Corporation may withhold from any amounts
payable under this Employment Agreement such federal,
state or local taxes as shall be required to be
withheld pursuant to any applicable law or regulation.
e. The Executive's or the Corporation's failure to
insist upon strict compliance with any provision of
this Employment Agreement or the failure to assert any
right the Executive or the Corporation may have under
this Employment Agreement, including without limitation
the right of the Executive to terminate employment for
Good Reason pursuant to Section 4(c) of this Employment
Agreement, or the right of the Corporation to terminate
the Executive's employment for Cause pursuant to
Section 4(b) of this Employment Agreement, shall not be
deemed to be a waiver of such provision or right or any
other provision or right of this Employment Agreement.
f. This instrument contains the entire agreement of
the Executive and the Corporation with respect to the
subject matter hereof; and all promises,
representations, understandings, arrangements and prior
agreements are merged into this Employment Agreement
and accordingly superseded.
g. This Employment Agreement may be executed in
counterparts, each of which shall be deemed to be an
original but all of which together will constitute one
and the same instrument.
h. The Corporation and the Executive agree that
Cinergy shall be authorized to act for the Corporation
with respect to all aspects pertaining to the
administration and interpretation of this Employment
Agreement.
IN WITNESS WHEREOF, the Executive and the Corporation have caused
this Employment Agreement to be executed as of the day and year
first above written.
CINERGY CORP.
By: Xxxxxxx X. Xxxxxxxx
(Xxxxxxx X. Xxxxxxxx)
Chairman and Chief Executive Officer
CINERGY SERVICES, INC.
By: Xxxxxxx X. Xxxxxxxx
(Xxxxxxx X. Xxxxxxxx)
Chairman and Chief Executive Officer
THE CINCINNATI GAS & ELECTRIC COMPANY
By: Xxxxxxx X. Xxxxxxxx
(Xxxxxxx X. Xxxxxxxx)
Chairman and Chief Executive Officer
PSI ENERGY, INC.
By: Xxxxxxx X. Xxxxxxxx
(Xxxxxxx X. Xxxxxxxx)
Chairman and Chief Executive Officer
EXECUTIVE
Xxxxx X. Xxxxxx
(Xxxxx X. Xxxxxx)
