EX. 10.3
CONFORMED COPY
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT ("Agreement") made and
entered into as of the 12th day of October, 1996, by and
between Mineral Energy Company (the "Company"), a California
corporation, and Xxxxxxx X. Xxxx (the "Executive");
WHEREAS, the Executive is currently serving as
President and Chief Executive Officer of Enova Corporation,
a California corporation ("Enova"), and the Company desires
to secure the continued employment of the Executive in
accordance herewith;
WHEREAS, pursuant to the Agreement and Plan of
Merger (the "Merger Agreement"), dated as of October 12,
1996, among, inter alia, Enova, Pacific Enterprises, a
California corporation ("Pacific Enterprises"), and the
Company, the parties thereto have agreed to a merger (the
"Merger") pursuant to the terms thereof;
WHEREAS, the Executive is willing to commit
himself to be employed by the Company on the terms and
conditions herein set forth and thus to forego opportunities
elsewhere; and
WHEREAS, the parties desire to enter into this
Agreement, as of the Effective Date (as hereinafter
defined), setting forth the terms and conditions for the
employment relationship of the Executive with the Company
during the Employment Period (as hereinafter defined),
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) Employment. The Company agrees to employ the
Executive, and the Executive agrees to be employed by the
Company, in accordance with the terms and provisions of this
Agreement during the term thereof (as described below).
(b) Term. The term of the Executive's employment
under this Agreement shall commence (the "Effective Date")
as of the closing date (the "Closing Date") of the Merger,
as described in the Merger Agreement, and shall continue
until the earlier of the Executive's Mandatory Retirement
Age (as defined herein) or the fifth anniversary of the
Effective Date (such term being referred to hereinafter as
the "Employment Period"); provided, however, that commencing
on the fourth anniversary of the Effective Date (and each
anniversary of the Effective Date thereafter) the term of
this Agreement shall automatically be extended for one
additional year, unless, prior to such date, the Company or
the Executive shall give written notice to the other party
that it or he, as the case may be, does not wish to so
extend this Agreement; and further provided, however, that
if the Merger Agreement is terminated, then, at the time of
such termination, this Agreement shall be deemed cancelled
and of no force or effect and the Executive shall continue
to be subject to such agreements and arrangements that were
in effect prior to the Closing Date. As a condition to the
Merger, the parties hereto agree that the Company shall be
responsible for all of the premises, covenants and
agreements set forth in this Agreement.
(c) Mandatory Retirement. In no event shall the
term of the Executive's employment hereunder extend beyond
the end of the month in which the Executive's 65th birthday
occurs (the "Mandatory Retirement Age").
2. Duties and Powers of Executive.
(a) Position.
(i) Period A. During the period commencing
on the Effective Date and ending on the earlier of
September 1, 2000 or the second anniversary of the
Effective Date ("Period A"), the Executive shall serve
as the Vice Chairman of the Board of Directors of the
Company (the "Board"), President and Chief Operating
Officer of the Company with such authority, duties and
responsibilities with respect to such position as set
forth below in subsection (b) hereof. In this
capacity, the Executive shall be a member of the office
of the Chairman (which shall be an office held jointly
by the Executive and the Chief Executive
Officer/Chairman of the Board) ("Office of the
Chairman") and shall report only to the Chief Executive
Officer/Chairman of the Board. The presidents and
principal executive officers of the Company's regulated
and nonregulated businesses and the senior-most person
in charge of each of the Company's policy units shall
report directly to the Office of the Chairman.
(ii) Period B. During the period, if any,
commencing on the second anniversary of the Effective
Date and ending on September 1, 2000 ("Period B"), the
Executive shall be nominated to the position of, and if
elected shall serve as, the Vice Chairman of the Board,
Chief Executive Officer and President of the Company
with such authority, duties and responsibilities with
respect to such position as set forth below. In this
capacity, the Executive shall report only to the Board.
The presidents and chief executive officers of the
Company's regulated and nonregulated businesses and the
senior-most person in charge of each of the Company's
policy units shall report directly to the Executive.
(iii) Period C. During the period, if any,
commencing September 1, 2000 and ending on the
expiration date of the Agreement ("Period C"), the
Executive shall be nominated to the position of, and if
elected shall serve as, Chairman, Chief Executive
Officer and President of the Company with such
authority, duties and responsibilities with respect to
such position as set forth below. In this capacity,
the Executive shall report only to the Board. The
presidents and chief executive officers of the
Company's regulated and nonregulated businesses and the
senior-most person in charge of each of the Company's
policy units shall report directly to the Executive.
(b) Duties.
(i) Chief Executive Officer. The duties of
the Chief Executive Officer of the Company shall
include but not be limited to directing the overall
business, affairs and operations of the Company,
through its officers, all of whom shall report directly
or indirectly to the Office of the Chairman or, if
there is no Office of the Chairman, to the Chief
Executive Officer.
(ii) Chief Operating Officer. The duties of
the Chief Operating Officer of the Company shall
include, but not be limited to, directing the day-to-
day business, affairs and operations of the Company,
under the supervision of the Chief Executive Officer
and (to the extent the Chief Executive Officer is not
also the President) the President.
(iii) President. The duties of the
President of the Company shall include, but not be
limited to, assisting the Chief Executive Officer (to
the extent the President is not also the Chief
Executive Officer) in directing the overall business,
affairs and operations of the Company.
(iv) Chairman of the Board. The Chairman of
the Board shall be a director and shall preside at
meetings of the Board and meetings of the shareholders.
The Chairman shall be responsible for Board and
shareholder governance and shall have such duties and
responsibilities as are customarily assigned to such
positions.
(v) Vice Chairman of the Board. The Vice
Chairman of the Board shall be a director and, in the
absence of the Chairman, shall preside at meetings of
the Board and meetings of shareholders. The Vice
Chairman shall assist the Chairman in his
responsibility for Board and shareholder governance and
shall have such duties as are customarily assigned to
such position.
(c) Board Membership. The Executive shall be a
member of the Board on the first day of the Employment
Period, and the Board shall propose the Executive for re-
election to the Board throughout the Employment Period.
(d) Attention. During the Employment Period, and
excluding any periods of vacation and sick leave to which
the Executive is entitled, the Executive shall devote full
attention and time during normal business hours to the
business and affairs of the Company and, to the extent
necessary to discharge the responsibilities assigned to the
Executive under this Agreement, use the Executive's best
efforts to carry out such responsibilities faithfully and
efficiently. It shall not be considered a violation of the
foregoing for the Executive to serve on corporate, industry,
civic or charitable boards or committees, so long as such
activities do not interfere with the performance of the
Executive's responsibilities as an employee of the Company
in accordance with this Agreement.
3. Compensation.
It is the Board's intention to provide the
Executive with compensation opportunities that, in total,
are at a level that is consistent with that provided by
comparable companies to executives of similar levels of
responsibility, expertise and corporate and individual
performance as determined by the compensation committee of
the Board. In this regard, the Executive shall receive the
following compensation for his services hereunder to the
Company:
(a) Base Salary. During the Employment Period,
the Executive's annual base salary ("Annual Base Salary")
shall be payable in accordance with the Company's general
payroll practices. During Period A, the Executive's Annual
Base Salary shall in no event be less than $645,000. During
Period B and Period C, if the Executive is elected to the
position of Chief Executive Officer, the Executive's Annual
Base Salary shall in no event be less than the annual base
salary of the Executive's predecessor as Chief Executive
Officer of the Company. Subject to Section 4(d)(ii), the
Board in its discretion may from time to time direct such
upward adjustments in the Executive's 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 and the Executive's
performance. Any increase in Annual Base Salary shall not
serve to limit or reduce any other obligation of the Company
under this Agreement.
(b) Incentive Compensation. Subject to Section
4(d)(ii), during the Employment Period, the Executive shall
participate in annual incentive compensation plans and long-
term incentive compensation plans of the Company and, to the
extent appropriate, the Company's subsidiaries (which
long-term incentive compensation plans may include plans
offering stock options, restricted stock and other long-term
incentive compensation and all such annual and long-term
plans to be hereinafter referred to as the "Incentive
Compensation Plans") and will be granted awards thereunder
providing him with the opportunity to earn, on a year-by-
year basis, annual and long-term incentive compensation (the
"Incentive Compensation Awards") at least equal (in terms of
target, maximum and minimum awards expressed as a percentage
of Annual Base Salary) to the greater of the Executive's
opportunities that were in effect prior to the Effective
Date and the awards granted to the Chief Executive Officer
of the Company under the Incentive Compensation Plans during
Period A. Any equity awards granted to the Executive may be
granted, at the Executive's election, to trusts established
for the benefit of members of the Executive's family. With
respect to incentive compensation awards granted prior to
the Effective Date, the Executive shall be entitled to
retain such awards in accordance with their terms, which
shall be appropriately adjusted as a result of the Merger.
(c) Retirement and Welfare Benefit Plans. In
addition to the benefits provided under Section 3(b), during
the Employment Period and so long as the Executive is
employed by the Company, he shall be eligible to participate
in all other savings, retirement and welfare plans,
practices, policies and programs applicable generally to
employees and/or senior executive officers of the Company
and its domestic subsidiaries, except with respect to any
benefits under any plan, practice, policy or program to
which the Executive has waived his rights in writing. To
the extent that benefits payable or provided to the
Executive under such plans are materially less favorable on
a benefit by benefit basis than the benefits that would have
been payable or provided to the Executive under comparable
Enova tax-qualified retirement plans, executive retirement
plans, split dollar and other executive life insurance
arrangements in which the Executive was a participant (based
on the terms of such plans as of the Effective Date), the
Executive shall be entitled to benefits pursuant to the
terms of this Agreement equal to the excess of the benefits
provided under the applicable Enova plans over the benefits
provided under the comparable Company plans.
(d) Expenses. The Company shall reimburse the
Executive for all expenses, including those for travel and
entertainment, properly incurred by him in the performance
of his duties hereunder in accordance with policies
established from time to time by the Board.
(e) Fringe Benefits and Perquisites. During the
Employment Period and so long as the Executive is employed
by the Company, he shall be entitled to receive fringe
benefits and perquisites in accordance with the plans,
practices, programs and policies of the Company and, to the
extent appropriate, the Company's subsidiaries from time to
time in effect, commensurate with his position.
4. Termination of Employment.
(a) Death or Disability. The Executive's
employment shall terminate upon the Executive's death or, at
the election of the Board or the Executive, by reason of
Disability (as herein defined) during the Employment Period;
provided, however, that the Board may not terminate the
Executive's employment hereunder by reason of Disability
unless at the time of such termination there is no
reasonable expectation that the Executive will return to
work within the next ninety (90) day period. For purposes
of this Agreement, disability ("Disability") shall have the
same meaning as set forth in the Enova long-term disability
plan or its successor.
(b) By the Company for Cause. The Company may
terminate the Executive's employment during the Employment
Period for Cause (as herein defined). For purposes of this
Agreement, "Cause" shall mean (i) the willful and continued
failure by the Executive to substantially perform the
Executive's duties with the Company (other than any such
failure resulting from the 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(d)) or
(ii) the Executive's commission of one or more acts of moral
turpitude that constitute a violation of applicable law
(including but not limited to a felony) which have or result
in an adverse effect on the Company, monetarily or otherwise
or one or more significant acts of dishonesty. For purposes
of clause (i) of this definition, 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
Company.
(c) By the Company without Cause.
Notwithstanding any other provision of this Agreement, the
Company may terminate the Executive's employment other than
by a termination for Cause during the Employment Period, but
only upon the affirmative vote of three-fourths (3/4) of the
membership of the Board.
(d) By the Executive for Good Reason. The
Executive may terminate his employment during the Employment
Period for Good Reason (as herein defined). For purposes of
this Agreement, "Good Reason" shall mean the occurrence
without the written consent of the Executive of any one of
the following acts by the Company, or failures by the
Company to act, unless such act or failure to act is
corrected prior to the Date of Termination (as hereinafter
defined) specified in the Notice of Termination (as
hereinafter defined) given in respect thereof:
(i) an adverse change in the
Executive's title, authority, duties, responsibilities
or reporting lines as specified in Section 2(a) and
2(b) of this Agreement;
(ii) a reduction by the Company in (A)
the Executive's Annual Base Salary as in effect on the
date hereof or as the same may be increased from time
to time or (B) the Executive's aggregate annualized
compensation and benefits opportunities, except, in the
case of both (A) and (B), for across-the-board
reductions similarly affecting all executives (both of
the Company and of any Person (as hereinafter defined)
then in control of the Company) whose compensation is
directly determined by the compensation committee of
the Board (and the compensation committee of the board
of directors of any Person then in control of the
Company); provided that, the exception for across-the-
board reductions shall not apply following a Change in
Control (as hereinafter defined);
(iii) the relocation of the Executive's
principal place of employment to a location away from
the Company's headquarters or a substantial increase in
the Executive's business travel obligations outside of
the Southern California area as of the Effective Date,
other than any such increase that (A) arises in
connection with extraordinary business activities of
the Company and (B) is understood not to be part of the
Executive's regular duties with the Company;
(iv) the failure by the Company to pay
to the Executive any portion of the Executive's current
compensation and benefits or to pay to the Executive
any portion of an installment of deferred compensation
under any deferred compensation program of the Company
within thirty (30) days of the date such compensation
is due;
(v) the failure by the shareholders to
elect the Executive to the Board during the Employment
Period;
(vi) the failure by the Board to elect
the Executive to the positions of Vice Chairman of the
Board, President and Chief Executive Officer during
Period B, or Chairman of the Board, President and Chief
Executive Officer during Period C;
(vii) any purported termination of the
Executive's employment that is not effected pursuant to
a Notice of Termination satisfying the requirements of
Section 4(f); for purposes of this Agreement, no such
purported termination shall be effective;
(viii) the failure by the Company to
obtain a satisfactory agreement from any successor of
the Company requiring such successor to assume and
agree to perform the Company's obligations under this
Agreement, as contemplated in Section 11; or
(ix) the failure by the Company to
comply with any material provision of this Agreement.
Following a Change in Control (as hereinafter
defined), the Executive's determination that an act or
failure to act constitutes Good Reason shall be presumed to
be valid unless such determination is deemed to be
unreasonable by an arbitrator. The Executive's right to
terminate the Executive's employment for Good Reason shall
not be affected by the Executive's incapacity due to
physical or mental illness. The Executive's continued
employment shall not constitute consent to, or a waiver of
rights with respect to, any act or failure to act
constituting Good Reason hereunder.
(e) Change in Control. Change in Control shall
mean the occurrence of any of the following events:
(i) Any Person is or becomes the Beneficial
Owner, directly or indirectly, of securities of the
Company (not including in the securities beneficially
owned by such Person any securities acquired directly
from the Company or its affiliates other than in
connection with the acquisition by the Company or its
affiliates of a business) representing twenty percent
(20%) or more of the combined voting power of the
Company's then outstanding securities; or
(ii) The following individuals cease for any
reason to constitute a majority of the number of
directors then serving: individuals who, on the date
hereof, constitute the Board and any new director
(other than a director whose initial assumption of
office is in connection with an actual or threatened
election contest, including but not limited to a
consent solicitation, relating to the election of
directors of the Company) whose appointment or election
by the Board or nomination for election by the
Company's shareholders was approved or recommended by a
vote of at least two-thirds (2/3) of the directors then
still in office who either were directors on the date
hereof or whose appointment, election or nomination for
election was previously so approved or recommended; or
(iii) There is consummated a merger or
consolidation of the Company or any direct or indirect
subsidiary of the Company with any other corporation,
other than (A) a merger or consolidation which would
result in the voting securities of the Company
outstanding immediately prior to such merger or
consolidation continuing to represent (either by
remaining outstanding or by being converted into voting
securities of the surviving entity or any parent
thereof), in combination with the ownership of any
trustee or other fiduciary holding securities under an
employee benefit plan of the Company or any subsidiary
of the Company, at least sixty percent (60%) of the
combined voting power of the securities of the Company
or such surviving entity or any parent thereof
outstanding immediately after such merger or
consolidation, or (B) a merger or consolidation
effected to implement a recapitalization of the Company
(or similar transaction) in which no Person is or
becomes the beneficial owner, directly or indirectly,
of securities of the Company (not including in the
securities beneficially owned by such Person any
securities acquired directly from the Company or its
affiliates other than in connection with the
acquisition by the Company or its affiliates of a
business) representing twenty percent (20%) or more of
the combined voting power of the Company's then
outstanding securities; or
(iv) The shareholders of the Company approve
a plan of complete liquidation or dissolution of the
Company or there is consummated an agreement for the
sale or disposition by the Company of all or
substantially all of the Company's assets, other than a
sale or disposition by the Company of all or
substantially all of the Company's assets to an entity,
at least sixty percent (60%) of the combined voting
power of the voting securities of which are owned by
shareholders of the Company in substantially the same
proportions as their ownership of the Company
immediately prior to such sale.
"Person" shall have the meaning given in section
3(a)(9) of the Securities Exchange Act of 1934 (the
"Exchange Act"), as modified and used in sections 13(d) and
14(d) thereof, except that such term shall not include (i)
the Company or any of its subsidiaries, (ii) a trustee or
other fiduciary holding securities under an employee benefit
plan of the Company or any of its affiliates, (iii) an
underwriter temporarily holding securities pursuant to an
offering of such securities, (iv) a corporation owned,
directly or indirectly, by the shareholders of the Company
in substantially the same proportions as their ownership of
stock of the Company, or (v) a person or group as used in
Rule 13d-1(b) under the Exchange Act.
"Beneficial Owner" shall have the meaning set
forth in Rule 13d-3 under the Exchange Act.
Notwithstanding the foregoing, any event or
transaction which would otherwise constitute a Change in
Control (a "Transaction") shall not constitute a Change in
Control for purposes of this Agreement if, in connection
with the Transaction, the Executive participates as an
equity investor in the acquiring entity or any of its
affiliates (the "Acquiror"). For purposes of the preceding
sentence, the Executive shall not be deemed to have
participated as an equity investor in the Acquiror by virtue
of (i) obtaining beneficial ownership of any equity interest
in the Acquiror as a result of the grant to the Executive of
an incentive compensation award under one or more incentive
plans of the Acquiror (including, but not limited to, the
conversion in connection with the Transaction of incentive
compensation awards of the Company into incentive
compensation awards of the Acquiror), on terms and
conditions substantially equivalent to those applicable to
other executives of the Company immediately prior to the
Transaction, after taking into account normal differences
attributable to job responsibilities, title and the like,
(ii) obtaining beneficial ownership of any equity interest
in the Acquiror on terms and conditions substantially
equivalent to those obtained in the Transaction by all other
shareholders of the Company, or (iii) obtaining beneficial
ownership of any equity interest in the Acquiror in a manner
unrelated to a Transaction.
(f) Notice of Termination. During the
Employment Period, any purported termination of the
Executive's employment (other than by reason of death) shall
be communicated by written Notice of Termination from one
party hereto to the other party hereto in accordance with
Section 12(b). For purposes of this Agreement, a "Notice of
Termination" shall mean a notice that shall indicate the
specific termination provision in this Agreement relied
upon, if any, and shall set 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. Further, a Notice of Termination
for Cause is required to include a copy of a resolution duly
adopted by the affirmative vote of not less than three-
fourths (3/4) of the entire membership of the Board at a
meeting of the Board that was called and held no more than
ninety (90) days after the date the Board had knowledge of
the most recent act or omission giving rise to such breach
for the purpose of considering such termination (after
reasonable notice to the Executive and an opportunity for
the Executive, together with the Executive's counsel, to be
heard before the Board and, if possible, to cure the breach
that was the basis for the Notice of Termination for Cause)
finding that, in the good faith opinion of the Board, the
Executive was guilty of conduct set forth in clause (i) or
(ii) of the definition of Cause herein, and specifying the
particulars thereof in detail. Unless the Board determines
otherwise, a Notice of Termination by the Executive alleging
a termination for Good Reason must be made within 180 days
of the act or failure to act that the Executive alleges to
constitute Good Reason.
(g) Date of Termination. "Date of
Termination," with respect to any purported termination of
the Executive's employment during the Employment Period,
shall mean the date specified in the Notice of Termination
(which, in the case of a termination by the Company, for
reasons other than Cause, shall not be less than thirty (30)
days and, in the case of a termination by the Executive,
shall not be less than fifteen (15) days nor more than sixty
(60) days), from the date such Notice of Termination is
given).
5. Obligations of the Company Upon Termination.
(a) Termination Other Than for Cause, Death or
Disability. During the Employment Period, if the Company
shall terminate the Executive's employment (other than for
Cause, death or Disability) or the Executive shall terminate
his employment for Good Reason (termination in any such case
being referred to as "Termination") the Company shall pay to
the Executive the amounts, and provide the Executive with
the benefits, described in this Section 5 (hereinafter
referred to as the "Severance Payments"). Subject to
Section 5(g), the amounts specified in this Section 5(a)
shall be paid within thirty (30) days after the Date of
Termination.
(i) Lump Sum Payment. In lieu of any
further payments of Annual Base Salary or annual
Incentive Compensation Awards to the Executive for
periods subsequent to the Date of Termination, the
Company shall pay to the Executive a lump sum amount in
cash equal to the product of (X) the sum of (A) the
Executive's Annual Base Salary and (B) the greater of
the Executive's target bonus for the year of
termination or the average of the three (3) years'
highest gross bonus awards, not necessarily
consecutive, paid by the Company (or its predecessor)
to the Executive in the five (5) years preceding the
year of termination and (Y) the number of years
remaining in the Employment Period (including
fractional years), but in no event less than two (2);
provided, however, that in the event of a Termination
following a Change in Control such multiplier shall not
be less than three (3).
(ii) Accrued Obligations. The Company shall
pay the Executive a lump sum amount in cash equal to
the sum of (A) the Executive's Annual Base Salary
through the Date of Termination to the extent not
theretofore paid, (B) an amount equal to any annual
Incentive Compensation Awards earned with respect to
fiscal years ended prior to the year that includes the
Date of Termination to the extent not theretofore paid
and (C) an amount equal to the target amount payable
under any annual Incentive Compensation Awards for the
fiscal year that includes the Date of Termination or,
if greater, the average of the three (3) years' highest
gross bonus awards, not necessarily consecutive, paid
by the Company (or its predecessor) to the Executive in
the five (5) years preceding the year 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 365, in each case to the
extent not theretofore paid. (The amounts specified in
clauses (A), (B) and (C) shall be hereinafter referred
to as the "Accrued Obligations.")
(iii) Deferred Compensation. In the event
of a Termination following a Change in Control, the
Company shall pay the Executive a lump sum payment in
an amount equal to any compensation previously deferred
by the Executive (together with any accrued interest or
earnings thereon).
(iv) Pension Supplement. The Company shall
provide the Executive with such additional years of age
and service credit for purposes of the calculation of
retirement benefits under the Enova Supplemental
Executive Retirement Plan (the "Enova SERP") as if he
had remained employed for the remainder of the
Employment Period, but in no event less than two (2)
years, provided, however, that there shall be no
reduction under the Enova SERP for early retirement as
set forth in paragraph 4.a.ii of the Enova SERP, except
for the early retirement reduction factor determined in
accordance with the table in Section 5.4 of the San
Diego Gas & Electric Company Pension Plan, as adopted
by Enova (the "Pension Plan"); and provided, further,
however, that in the event of a Termination following a
Change in Control, the Company shall pay the Executive
a lump sum payment in an amount equal to the benefits
under the Enova SERP as described in paragraph 2.c of
the Enova SERP, less the value calculated consistently
with paragraph 4.b of the SERP of the Executive's
entitlement under the Pension Plan, such payment to be
calculated and paid without regard to the limitation
described in the Enova SERP relating to Section 280G of
the Code and with such additional years of age and
service credit as if he had remained employed for the
remainder of the Employment Period, but in no event
less than two (2) years; and in either case the
Executive's termination shall be a "Qualifying
Termination" as defined in the Split Dollar Life
Insurance Agreement entered into between the Executive
and Enova, and where necessary the Company shall take
such steps, including the payment of additional
premiums, as may be necessary so that the cash value of
the policy as of the Date of Termination shall reflect
the additional age and service credit.
(v) Accelerated Vesting and Payment of Long-
Term Incentive Awards. All equity-based long-term
Incentive Compensation Awards held by the Executive
under any long- term Incentive Compensation Plan
maintained by the Company or any affiliate shall
immediately vest and become exercisable as of the Date
of Termination, to be exercised in accordance with the
terms of the applicable plan and award agreement;
provided, however, that any such awards granted on or
after the Effective Date shall remain outstanding and
exercisable until the earlier of (A) eighteen (18)
months following the Date of Termination or (B) the
expiration of the original term of such award (it being
understood that all awards granted prior to the
Effective Date shall remain outstanding and exercisable
for a period that is no less than that provided for in
the applicable agreement in effect as of the date of
grant), and the Company shall pay to the Executive,
with respect to all cash-based, long-term Incentive
Compensation Awards made to the Executive that are
outstanding under any long-term Incentive Compensation
Plan maintained by the Company or any affiliate an
amount equal to the target amount payable under such
long-term Incentive Compensation Awards multiplied by a
fraction, the numerator of which shall be the number of
days from the beginning of the award cycle to and
including the Date of Termination, and the denominator
of which shall be the number of days in the cycle as
originally granted.
(vi) Continuation of Welfare Benefits. For
(A) the remainder of the Employment Period, but in no
event less than a period of two (2) years or (B) until
the Executive is eligible for retiree medical benefits,
whichever is longer, immediately following the Date of
Termination, the Company shall arrange to provide the
Executive and his dependents with life, disability,
accident and health insurance benefits substantially
similar to those provided to the Executive and his
dependents immediately prior to the Date of
Termination, provided, however, that if the Executive
becomes employed with another employer and is eligible
to receive life, disability, accident and health
insurance benefits under another employer-provided
plan, the benefits under the Company's plans shall be
secondary to those provided under such other plan
during such applicable period of eligibility, and
further provided, however, that in the event of a
termination following a Change in Control such period
shall not be less than the number of years until the
Executive reaches normal retirement age as defined
under the Enova tax-qualified plans.
(b) Termination by the Company for Cause or by
the Executive Other than for Good Reason. Subject to the
provisions of Section 6 of this 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 for Good
Reason, the Company shall have no further obligations to the
Executive under this Agreement other than the Accrued
Obligations.
(c) Termination due to Death or Disability. If
the Executive's employment shall terminate by reason of
death or Disability, the Company shall pay the Executive or
his estate, as the case may be, the Accrued Obligations and,
solely in the case of termination by reason of Disability,
the Pension Supplement. Such payments shall be in addition
to those rights and benefits to which the Executive or his
estate may be entitled under the relevant Company plans or
programs.
(d) Code Section 280G.
(i) Notwithstanding any other provisions of
this Agreement, in the event that any payment or
benefit received or to be received by the Executive
(whether pursuant to the terms of this Agreement or any
other plan, arrangement or agreement with (A) the
Company, (B) any Person (as defined in Section 4(e))
whose actions result in a Change in Control or (C) any
Person affiliated with the Company or such Person) (all
such payments and benefits, including the Severance
Payments, being hereinafter called "Total Payments")
would not be deductible (in whole or part) by the
Company, an affiliate or Person making such payment or
providing such benefit as a result of section 280G of
the Code, then, to the extent necessary to make such
portion of the Total Payments deductible (and after
taking into account any reduction in the Total Payments
provided by reason of section 280G of the Code in such
other plan, arrangement or agreement), the cash
Severance Payments shall first be reduced (if
necessary, to zero), and all other Severance Payments
shall thereafter be reduced (if necessary, to zero);
provided, however, that the Executive may elect to have
the noncash Severance Payments reduced (or eliminated)
prior to any reduction of the cash Severance Payments.
(ii) For purposes of this limitation, (A) no
portion of the Total Payments the receipt or enjoyment
of which the Executive shall have waived at such time
and in such manner as not to constitute a "payment"
within the meaning of section 280G(b) of the Code shall
be taken into account, (B) no portion of the Total
Payments shall be taken into account which, in the
opinion of tax counsel ("Tax Counsel") reasonably
acceptable to the Executive and selected by the
Company's accounting firm which (or, in the case of a
payment following a Change in Control the accounting
firm that was, immediately prior to the Change in
Control, the Company's independent auditor) (the
"Auditor"), does not constitute a "parachute payment"
within the meaning of section 280G(b)(2) of the Code,
including by reason of section 280G(b)(4)(A) of the
Code, (C) the Severance Payments shall be reduced only
to the extent necessary so that the Total Payments
(other than those referred to in clause (A) or (B)) in
their entirety constitute reasonable compensation for
services actually rendered within the meaning of
section 280G(b)(4)(B) of the Code or are otherwise not
subject to disallowance as deductions by reason of
section 280G of the Code, in the opinion of Tax
Counsel, and (D) the value of any noncash benefit or
any deferred payment or benefit included in the Total
Payments shall be determined by the Auditor in
accordance with the principles of sections 280G(d)(3)
and (4) of the Code.
(e) Consulting and Non-Competition. If the
Total Payments are subject to reduction in accordance with
the above provisions of Section 5(d), the Executive shall
have the option, to be exercised within ten (10) days after
receipt of notice of such reduction from the Company, to
enter into a consulting and non-competition agreement with
the Company (the "Consulting and Non-Competition
Agreement"), which shall (1) provide the Executive with
payments and benefits, payable over the term of the
agreement, the present value of which in the aggregate is
equal to or greater than the present value (determined by
applying a discount rate equal to the interest rate provided
in section 1274(b)(2)(B) of the Code) of the balance of the
payments and benefits otherwise payable to the Executive
without regard to the provisions of Section 5(d),
(2) require the Executive to make his services available to
the Company for no more than twenty (20) hours per month and
(3) last for a period of not more than two (2) years (unless
the Executive consents to a longer period).
(f) Gross-Up Payment. In the event that the
Executive receives a notice from the Internal Revenue
Service to the effect that the amounts payable under the
Consulting and Non-Competition Agreement would be subject
(in whole or part) to the tax (the "Excise Tax") imposed
under section 4999 of the Code, within thirty (30) days
after the date the Chairman of the Board receives a copy of
such notice the Company shall pay to the Executive such
additional amounts (the "Gross-Up Payment") such that the
net amount retained by the Executive, after deduction of any
Excise Tax on the Total Payments and any federal, state and
local income and employment taxes and Excise Tax upon the
Gross-Up Payment, shall be equal to the Total Payments. For
purposes of determining the amount of the Gross-Up Payment,
the Executive shall be deemed to pay federal income tax at
the highest marginal rate of federal income taxation in the
calendar year in which the Gross-Up Payment is to be made
and state and local income taxes at the highest marginal
rate of taxation in the state and locality of the
Executive's residence on the date on which the Gross-Up
Payment is calculated for purposes of this section, net of
the maximum reduction in federal income taxes which could be
obtained from deduction of such state and local taxes. In
the event that the Excise Tax is subsequently determined to
be less than the amount taken into account hereunder, the
Executive shall repay to the Company, at the time that the
amount of such reduction in Excise Tax is finally
determined, the portion of the Gross-Up Payment attributable
to such reduction (plus that portion of the Gross-Up Payment
attributable to the Excise Tax and federal, state and local
income tax imposed on the Gross-Up Payment being repaid by
the Executive to the extent that such repayment results in a
reduction in Excise Tax and/or a federal, state or local
income tax deduction) plus interest on the amount of such
repayment at the rate provided in section 1274(b)(2)(B) of
the Code. In the event that the Excise Tax is determined to
exceed the amount taken into account hereunder (including by
reason of any payment the existence or amount of which
cannot be determined at the time of the Gross-Up Payment),
the Company shall make an additional Gross-Up Payment in
respect of such excess (plus any interest, penalties or
additions payable by the Executive with respect to such
excess) at the time that the amount of such excess is
finally determined. The Executive and the Company shall
each reasonably cooperate with the other in connection with
any administrative or judicial proceedings concerning the
existence or amount of liability for Excise Tax with respect
to the Total Payments.
(g) Release. Notwithstanding anything herein to
the contrary, the Company's obligation to make the payments
provided for in this Section 5 is expressly made subject to
and conditioned upon (i) the Executive's prior execution of
a release substantially in the form attached hereto as
Exhibit A within forty-five (45) days after the applicable
Date of Termination and (ii) the Executive's non-revocation
of such release in accordance with the terms thereof.
6. Nonexclusivity of Rights.
Nothing in this Agreement shall prevent or limit
the Executive's continuing or future participation in any
benefit, plan, program, policy or practice provided by the
Company 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
Effective Date with the Company. Amounts which are vested
benefits or which the Executive is otherwise entitled to
receive under any benefit, plan, policy, practice or program
of, or any contract or agreement entered into with, the
Company shall be payable in accordance with such benefit,
plan, policy, practice or program or contract or agreement
except as explicitly modified by this Agreement.
7. Full Settlement; Mitigation.
The Company's obligation to make the payments
provided for in this Agreement and otherwise to perform its
obligations hereunder shall not be affected by any set-off,
counterclaim, recoupment, defense or other claim, right or
action which the Company may have against the Executive or
others, provided that nothing herein shall preclude the
Company from separately pursuing recovery from the Executive
based on any such claim. 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 Agreement and such amounts shall not
be reduced whether or not the Executive obtains other
employment.
8. Arbitration.
Any dispute about the validity, interpretation,
effect or alleged violation of this Agreement (an
"arbitrable dispute") must be submitted to confidential
arbitration in San Diego, California. Arbitration shall
take place before an experienced employment arbitrator
licensed to practice law in such state and selected in
accordance with the Model Employment Arbitration Procedures
of the American Arbitration Association. Arbitration shall
be the exclusive remedy of any arbitrable dispute. Should
any party to this Agreement pursue any arbitrable dispute by
any method other than arbitration, the other party shall be
entitled to recover from the party initiating the use of
such method all damages, costs, expenses and attorneys' fees
incurred as a result of the use of such method.
Notwithstanding anything herein to the contrary, nothing in
this Agreement shall purport to waive or in any way limit
the right of any party to seek to enforce any judgment or
decision on an arbitrable dispute in a court of competent
jurisdiction.
9. Confidentiality.
The Executive acknowledges that in the course of
his employment with the Company, he has acquired non-public
privileged or confidential information and trade secrets
concerning the operations, future plans and methods of doing
business ("Proprietary Information") of the Company, its
subsidiaries and affiliates; and the Executive agrees that
it would be extremely damaging to the Company, its
subsidiaries and affiliates if such Proprietary Information
were disclosed to a competitor of the Company, its
subsidiaries and affiliates or to any other person or
corporation. The Executive understands and agrees that all
Proprietary Information has been divulged to the Executive
in confidence and further understands and agrees to keep all
Proprietary Information secret and confidential (except for
such information which is or becomes publicly available
other than as a result of a breach by the Executive of this
provision) without limitation in time. In view of the
nature of the Executive's employment and the Proprietary
Information the Executive has acquired during the course of
such employment, the Executive likewise agrees that the
Company, its subsidiaries and affiliates would be
irreparably harmed by any disclosure of Proprietary
Information in violation of the terms of this paragraph and
that the Company, its subsidiaries and affiliates shall
therefore be entitled to preliminary and/or permanent
injunctive relief prohibiting the Executive from engaging in
any activity or threatened activity in violation of the
terms of this paragraph and to any other relief available to
them. Inquiries regarding whether specific information
constitutes Proprietary Information shall be directed to the
Board provided, that the Company shall not unreasonably
classify information as Proprietary Information.
10. Non-Solicitation of Employees.
The Executive recognizes that he possesses and
will possess confidential information about other employees
of the Company, its subsidiaries and affiliates relating to
their education, experience, skills, abilities, compensation
and benefits, and inter-personal relationships with
customers of the Company, its subsidiaries and affiliates.
The Executive recognizes that the information he possesses
and will possess about these other employees is not
generally known, is of substantial value to the Company, its
subsidiaries and affiliates in developing their business and
in securing and retaining customers, and has been and will
be acquired by him because of his business position with the
Company, its subsidiaries and affiliates. The Executive
agrees that, during the Employment Period and for a period
of one (1) year thereafter, he will not, directly or
indirectly, solicit or recruit any employee of the Company,
its subsidiaries or affiliates for the purpose of being
employed by him or by any competitor of the Company, its
subsidiaries or affiliates on whose behalf he is acting as
an agent, representative or employee and that he will not
convey any such confidential information or trade secrets
about other employees of the Company, its subsidiaries and
affiliates to any other person; provided, however, that it
shall not constitute a solicitation or recruitment of
employment in violation of this paragraph to discuss
employment opportunities with any employee of the Company,
its subsidiaries or affiliates who has either first
contacted the Executive or regarding whose employment the
Executive has discussed with and received the written
approval of the Chairman of the Board prior to making such
solicitation or recruitment. In view of the nature of the
Executive's employment with the Company, the Executive
likewise agrees that the Company, its subsidiaries and
affiliates would be irreparably harmed by any solicitation
or recruitment in violation of the terms of this paragraph
and that the Company, its subsidiaries and affiliates shall
therefore be entitled to preliminary and/or permanent
injunctive relief prohibiting the Executive from engaging in
any activity or threatened activity in violation of the
terms of this paragraph and to any other relief available to
them.
11. Legal Fees.
The Company shall pay to the Executive all legal
fees and expenses (including but not limited to fees and
expenses in connection with any arbitration) incurred by the
Executive in disputing in good faith any issue arising under
this Agreement relating to the termination of the
Executive's employment or in seeking in good faith to obtain
or enforce any benefit or right provided by this Agreement,
but in each case only to the extent the arbitrator or court
determines that the Executive had a reasonable basis for
such claim.
12. Successors.
(a) Assignment by Executive. This Agreement is
personal to the Executive and without the prior written
consent of the Company shall not be assignable by the
Executive otherwise than by will or the laws of descent and
distribution. This Agreement shall inure to the benefit of
and be enforceable by the Executive's legal representatives.
(b) Successors and Assigns of Company. This
Agreement shall inure to the benefit of and be binding upon
the Company, its successors and assigns.
(c) Assumption. The Company 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 Company to assume
expressly and agree to perform this Agreement in the same
manner and to the same extent that the Company would be
required to perform it if no such succession had taken
place. As used in this Agreement, "Company" shall mean the
Company as hereinbefore defined and any successor to its
businesses and/or assets as aforesaid that assumes and
agrees to perform this Agreement by operation of law or
otherwise.
13. Miscellaneous.
(a) Governing Law. This Agreement shall be
governed by and construed in accordance with the laws of the
State of California, without reference to its principles of
conflict of laws. The captions of this Agreement are not
part of the provisions hereof and shall have no force or
effect. This 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 Company to
agree to amend, modify, repeal, waive, extend or discharge
any provision of this Agreement or anything in reference
thereto.
(b) Notices. 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, in either case, to the Company's
headquarters or to such other address as either party shall
have furnished to the other in writing in accordance
herewith. Notices and communications shall be effective
when actually received by the addressee.
(c) Severability. The invalidity or
unenforceability of any provision of this Agreement shall
not affect the validity or enforceability of any other
provision of this Agreement.
(d) Taxes. The Company may withhold from any
amounts payable under this Agreement such federal, state or
local taxes as shall be required to be withheld pursuant to
any applicable law or regulation.
(e) No Waiver. The Executive's or the Company's
failure to insist upon strict compliance with any provision
hereof or any other provision of this Agreement or the
failure to assert any right the Executive or the Company may
have hereunder, including, without limitation, the right of
the Executive to terminate employment for Good Reason
pursuant to Section 4 of this Agreement, or the right of the
Company to terminate the Executive's employment for Cause
pursuant to Section 4 of this Agreement, shall not be deemed
to be a waiver of such provision or right or any other
provision or right of this Agreement.
(f) Entire Agreement. This instrument contains
the entire agreement of the Executive, the Company or any
predecessor or subsidiary thereof with respect to the
subject matter hereof, and all promises, representations,
understandings, arrangements and prior agreements are merged
herein and superseded hereby including, but not limited to,
that certain employment agreement dated September 18, 1996
between the Executive and Enova. Notwithstanding the
foregoing, the provisions of any employee benefit or
compensation plan, program or arrangement applicable to the
Executive, including that certain Incentive Bonus Agreement,
entered into between the Executive and Enova, shall remain
in effect, except as expressly otherwise provided herein.
IN WITNESS WHEREOF, the Executive and, pursuant to
due authorization from its Board of Directors, the Company
have caused this Agreement to be executed as of the day and
year first above written.
MINERAL ENERGY COMPANY
/s/ Xxxxx X. Xxxxxx
__________________________
Xxxxx X. Xxxxxx
President
/s/ Xxxxxxx X. Xxxx
--------------------------
Xxxxxxx X. Xxxx
EXHIBIT A
GENERAL RELEASE
This GENERAL RELEASE (the "Agreement"), dated
_______, is made by and between ___________________, a
California corporation (the "Company") and _____________
("you" or "your").
WHEREAS, you and the Company have previously
entered into that certain Employment Agreement dated
_____________, 1996 (the "Employment Agreement"); and
WHEREAS, Section 5 of the Employment Agreement
provides for the payment of severance benefits in the
event of the termination of your employment under certain
circumstances, subject to and conditioned upon your
execution and non-revocation of a general release of
claims by you against the Company and its subsidiaries
and affiliates.
NOW, THEREFORE, in consideration of the
premises and the mutual covenants herein contained, you
and the Company hereby agree as follows:
ONE: Your signing of this Agreement confirms
that your employment with the Company shall terminate at
the close of business on ___________, or earlier upon our
mutual agreement.
TWO: As a material inducement for the payment
of benefits under Section 5 of that certain Employment
Agreement between you and the Company, and except as
otherwise provided in this Agreement, you and the Company
hereby irrevocably and unconditionally release, acquit
and forever discharge the other from any and all Claims
either may have against the other. For purposes of this
Agreement and the preceding sentence, the words
"Releasee" or "Releasees" and "Claim" or "Claims," shall
have the meanings set forth below:
(a) The words "Releasee" or "Releasees"
shall refer to the you and to the Company and each of the
Company's owners, stockholders, predecessors, successors,
assigns, agents, directors, officers, employees,
representatives, attorneys, advisors, parent companies,
divisions, subsidiaries, affiliates (and agents,
directors, officers, employees, representatives,
attorneys and advisors of such parent companies,
divisions, subsidiaries and affiliates), and all persons
acting by, through, under or in concert with any of them.
(b) The words "Claim" or "Claims" shall
refer to any charges, complaints, claims, liabilities,
obligations, promises, agreements, controversies,
damages, actions, causes of action, suits, rights,
demands, costs, losses, debts and expenses (including
attorneys' fees and costs actually incurred) of any
nature whatsoever, known or unknown, suspected or
unsuspected, which you or the Company now, in the past
or, except as limited by law or regulation such as the
Age Discrimination in Employment Act (ADEA), in the
future may have, own or hold against any of the
Releasees; provided, however, that the word "Claim" or
"Claims" shall not refer to any charges, complaints,
claims, liabilities, obligations, promises, agreements,
controversies, damages, actions, causes of action, suits,
rights, demands, costs, losses, debts and expenses
(including attorneys' fees and costs actually incurred)
arising under [identify severance, employee benefits,
stock option and other agreements containing duties,
rights obligations etc. of either party that are to
remain operative]. Claims released pursuant to this
Agreement by you and the Company include, but are not
limited to, rights arising out of alleged violations of
any contracts, express or implied, any tort, any claim
that you failed to perform or negligently performed or
breached your duties during employment at the Company,
any legal restrictions on the Company's right to
terminate employees or any federal, state or other
governmental statute, regulation, or ordinance,
including, without limitation: (1) Title VII of the Civil
Rights Act of l964 (race, color, religion, sex and
national origin discrimination); (2) 42 U.S.C SECTION 1981
(discrimination); (3) 29 U.S.C. ss. 621-634 (age
discrimination); (4) 29 U.S.C. SECTION 206(d)(l) (equal pay);
(5) 42 U.S.C. ss. 12101, et seq. (disability); (6) the
California Constitution, Article I, Section 8
(discrimination); (7) the California Fair Employment and
Housing Act (discrimination, including race, color,
national origin, ancestry, physical handicap, medical
condition, marital status, religion, sex or age); (8)
California Labor Code Section 1102.1 (sexual orientation
discrimination); (9) Executive Order 11246 (race, color,
religion, sex and national origin discrimination); (10)
Executive Order 11141 (age discrimination); (11) ss. 503
and 504 of the Rehabilitation Act of 1973 (handicap
discrimination); (12) The Worker Adjustment and
Retraining Act (WARN Act); (13) the California Labor Code
(wages, hours, working conditions, benefits and other
matters); (14) the Fair Labor Standards Act (wages,
hours, working conditions and other matters); the Federal
Employee Polygraph Protection Act (prohibits employer
from requiring employee to take polygraph test as
condition of employment); and (15) any federal, state or
other governmental statute, regulation or ordinance which
is similar to any of the statutes described in clauses
(1) through (14).
THREE: You and the Company expressly waive and
relinquish all rights and benefits afforded by any
statute (including but not limited to Section 1542 of the
Civil Code of the State of California) which limits the
effect of a release with respect to unknown claims. You
and the Company do so understanding and acknowledging the
significance of the release of unknown claims and the
waiver of statutory protection against a release of
unknown claims (including but not limited to Section
1542). Section 1542 of the Civil Code of the State of
California states as follows:
"A GENERAL RELEASE DOES NOT EXTEND TO
CLAIMS WHICH THE CREDITOR DOES NOT
KNOW OR SUSPECT TO EXIST IN HIS FAVOR
AT THE TIME OF EXECUTING THE RELEASE,
WHICH IF KNOWN BY HIM MUST HAVE
MATERIALLY AFFECTED HIS SETTLEMENT
WITH THE DEBTOR."
Thus, notwithstanding the provisions of Section 1542 or
of any similar statute, and for the purpose of
implementing a full and complete release and discharge of
the Releasees, you and the Company expressly acknowledge
that this Agreement is intended to include in its effect,
without limitation, all Claims which are known and all
Claims which you or the Company do not know or suspect to
exist in your or the Company's favor at the time of
execution of this Agreement and that this Agreement
contemplates the extinguishment of all such Claims.
FOUR: The parties acknowledge that they might
hereafter discover facts different from, or in addition
to, those they now know or believe to be true with
respect to a Claim or Claims released herein, and they
expressly agree to assume the risk of possible discovery
of additional or different facts, and agree that this
Agreement shall be and remain effective, in all respects,
regardless of such additional or different discovered
facts.
FIVE: You hereby represent and acknowledge
that you have not filed any Claim of any kind against the
Company or others released in this Agreement. You
further hereby expressly agree never to initiate against
the Company or others released in this Agreement any
administrative proceeding, lawsuit or any other legal or
equitable proceeding of any kind asserting any Claims
that are released in this Agreement.
The Company hereby represents and acknowledges
that it has not filed any Claim of any kind against you
or others released in this Agreement. The Company
further hereby expressly agrees never to initiate against
you or others released in this Agreement any
administrative proceeding, lawsuit or any other legal or
equitable proceeding of any kind asserting any Claims
that are released in this Agreement.
SIX: You hereby represent and agree that you
have not assigned or transferred, or attempted to have
assigned or transfer, to any person or entity, any of the
Claims that you are releasing in this Agreement.
The Company hereby represents and agrees that
it has not assigned or transferred, or attempted to have
assigned or transfer, to any person or entity, any of the
Claims that it is releasing in this Agreement.
SEVEN: As a further material inducement to the
Company to enter into this Agreement, you hereby agree to
indemnify and hold each of the Releasees harmless from
all loss, costs, damages, or expenses, including without
limitation, attorneys' fees incurred by Releasees,
arising out of any breach of this Agreement by you or the
fact that any representation made in this Agreement by
you was false when made.
EIGHT: You and the Company represent and
acknowledge that, in executing this Agreement, neither is
relying upon any representation or statement not set
forth in this Agreement or the Severance Agreement.
NINE:
(a) This Agreement shall not in any way
be construed as an admission by the Company that it has
acted wrongfully with respect to you or any other person,
or that you have any rights whatsoever against the
Company, and the Company specifically disclaims any
liability to or wrongful acts against you or any other
person, on the part of itself, its employees or its
agents. This Agreement shall not in any way be construed
as an admission by you that you have acted wrongfully
with respect to the Company, or that you failed to
perform your duties or negligently performed or breached
your duties, or that the Company had good cause to
terminate your employment.
(b) If you are a party or are threatened
to be made a party to any proceeding by reason of the
fact that you were an officer [or director] of the
Company, the Company shall indemnify you against any
expenses (including reasonable attorney fees provided
that counsel has been approved by the Company prior to
retention), judgments, fines, settlements, and other
amounts actually or reasonably incurred by you in
connection with that proceeding, provided that you acted
in good faith and in a manner you reasonably believed to
be in the best interest of the Company. The limitations
of California Corporations Code Section 317 shall apply
to this assurance of indemnification.
(c) You agree to cooperate with the
Company and its designated attorneys, representatives and
agents in connection with any actual or threatened
judicial, administrative or other legal or equitable
proceeding in which the Company is or may be become
involved. Upon reasonable notice, you agree to meet with
and provide to the Company or its designated attorneys,
representatives or agents all information and knowledge
you have relating to the subject matter of any such
proceeding.
TEN: This Agreement is made and entered into
in California. This Agreement shall in all respects be
interpreted, enforced and governed by and under the laws
of the State of California. Any dispute about the
validity, interpretation, effect or alleged violation of
this Agreement (an "arbitrable dispute") must be
submitted to arbitration in [Los Angeles][San Diego],
California. Arbitration shall take place before an
experienced employment arbitrator licensed to practice
law in such state and selected in accordance with the
Model Employment Arbitration Procedures of the American
Arbitration Association. Arbitration shall be the
exclusive remedy for any arbitrable dispute. The
arbitrator in any arbitrable dispute shall not have
authority to modify or change the Agreement in any
respect. You and the Company shall each be responsible
for payment of one-half the amount of the arbitrator's
fee(s). Should any party to this Agreement institute any
legal action or administrative proceeding against the
other with respect to any Claim waived by this Agreement
or pursue any arbitrable dispute by any method other than
arbitration, the prevailing party shall be entitled to
recover from the initiating party all damages, costs,
expenses and attorneys' fees incurred as a result of that
action. The arbitrator's decision and/or award will be
fully enforceable and subject to an entry of judgment by
the Superior Court of the State of California for the
County of [Los Angeles][San Diego].
ELEVEN: Both you and the Company understand
that this Agreement is final and binding eight days after
its execution and return. Should you nevertheless
attempt to challenge the enforceability of this Agreement
as provided in Paragraph TEN or, in violation of that
Paragraph, through litigation, as a further limitation on
any right to make such a challenge, you shall initially
tender to the Company, by certified check delivered to
the Company, all monies received pursuant to Section 5 of
the Employment Agreement, plus interest, and invite the
Company to retain such monies and agree with you to
cancel this Agreement and void the Company's obligations
under Section 5 of the Employment Agreement. In the
event the Company accepts this offer, the Company shall
retain such monies and this Agreement shall be canceled
and the Company shall have no obligation under Section 5
of the Employment Agreement. In the event the Company
does not accept such offer, the Company shall so notify
you, and shall place such monies in an interest-bearing
escrow account pending resolution of the dispute between
you and the Company as to whether or not this Agreement
and the Company's obligations under Section 5 of the
Employment Agreement shall be set aside and/or otherwise
rendered voidable or unenforceable. Additionally, any
consulting agreement then in effect between you and the
Company shall be immediately rescinded with no
requirement of notice.
TWELVE: Any notices required to be given under
this Agreement shall be delivered either personally or by
first class United States mail, postage prepaid,
addressed to the respective parties as follows:
To Company: [TO COME]
Attn: [TO COME]
To You: ___________________
___________________
___________________
THIRTEEN: You understand and acknowledge that
you have been given a period of 45 days to review and
consider this Agreement (as well as statistical data on
the persons eligible for similar benefits) before signing
it and may use as much of this 45-day period as you wish
prior to signing. You are encouraged, at your personal
expense, to consult with an attorney before signing this
Agreement. You understand and acknowledge that whether
or not you do so is your decision. You may revoke this
Agreement within seven days of signing it. If you wish
to revoke, the Company's Vice President, Human Resources
must receive written notice from you no later than the
close of business on the seventh day after you have
signed the Agreement. If revoked, this Agreement shall
not be effective and enforceable and you will not receive
payments or benefits under Section 5 of the Employment
Agreement.
FOURTEEN: This Agreement constitutes the
entire Agreement of the parties hereto and supersedes any
and all other Agreements (except the Employment
Agreement) with respect to the subject matter of this
Agreement, whether written or oral, between you and the
Company. All modifications and amendments to this
Agreement must be in writing and signed by the parties.
FIFTEEN: Each party agrees, without further
consideration, to sign or cause to be signed, and to
deliver to the other party, any other documents and to
take any other action as may be necessary to fulfill the
obligations under this Agreement.
SIXTEEN: If any provision of this Agreement or
the application thereof is held invalid, the invalidity
shall not affect other provisions or applications of the
Agreement which can be given effect without the invalid
provisions or application; and to this end the provisions
of this Agreement are declared to be severable.
SEVENTEEN: This Agreement may be executed in
counterparts.
I have read the foregoing General Release and I
accept and agree to the provisions it contains and hereby
execute it voluntarily and with full understanding of its
consequences. I am aware it includes a release of all
known or unknown claims.
DATED:
DATED:
You acknowledge that you first received this
Agreement on [date].
___________________________
