INDIANA ENERGY, INC.
EMPLOYMENT AGREEMENT
This AGREEMENT by and among Indiana Energy, Inc. ("Indiana
Energy"), an Indiana corporation, in consideration of the
services to be performed for Indiana Energy and/or for one or
more of its direct or indirect subsidiaries or affiliates
(collectively, the "Company"), and Xxxx X. Xxxxxxx (the "Executive"),
is dated as of the first day of January, 1999.
1. Employment Period. The Company hereby agrees to
employ the Executive, and the Executive hereby agrees to remain
in the employ of the Company subject to the terms and conditions
of this Agreement, for the period commencing on the date the
Executive affixes his signature to this Agreement (the
"Commencement Date") and ending on the third annual anniversary
of the Commencement Date (the "Employment Period"); provided,
however, that the Employment Period shall automatically be
extended without action by either party for one (1) month
periods, without further action of the parties, as of the first
month anniversary of the Commencement Date and each succeeding
monthly anniversary unless the Company or the Executive shall
have served written notice to the other party prior to
February 1, 1999, or prior to any subsequent monthly anniversary,
as the case may be, of its or his intention that the Agreement
shall terminate at the end of the thirty-six (36) month period
that begins with the monthly anniversary of the Commencement Date
immediately following the date of such written notice; provided,
further, that the Employment Period shall automatically terminate
upon the Executive's attainment of age sixty-five (65). A notice
delivered by the Company or the Executive that it or he does not
intend to extend the term of this Agreement shall hereinafter be
referred to as a "Nonrenewal Notice." For purposes of this
Agreement, employment and compensation paid by any direct or
indirect subsidiary of the Company will be deemed to be
employment and compensation paid by the Company.
2. Terms of Employment.
(a) Position and Duties.
(i) During the Employment Period, the
Executive shall serve in the position and at the
location set forth on Exhibit A hereto.
(ii) During the Employment Period, and
excluding any periods of vacation and sick leave to
which the Executive is entitled, the Executive agrees
to devote full attention and time during normal
business hours to the business and affairs of the
Company and to use the Executive's reasonable best
efforts to perform such responsibilities in a
professional manner. It shall not be a violation of
this Agreement for the Executive to (A) serve on
corporate, civic or charitable boards or committees,
(B) deliver lectures, fulfill speaking engagements or
teach at educational institutions and (C) manage
personal investments, so long as such activities do not
significantly interfere with the performance of the
Executive's responsibilities as an employee of the
Company in accordance with this Agreement. It is
expressly understood and agreed that to the extent that
any such activities have been conducted by the
Executive prior to the Commencement Date, the continued
conduct of such activities (or the conduct of
activities similar in nature and scope thereto)
subsequent to the Commencement Date shall not
thereafter be deemed to interfere with the performance
of the Executive's responsibilities to the Company.
(b) Compensation.
(i) Base Salary - During the Employment
Period, the Executive shall receive an annual base
salary ("Annual Base Salary") in an amount no less than
the Executive's annual base salary in effect
immediately prior to the Commencement Date, payable in
cash. If the Annual Base Salary is increased after the
Commencement Date, the increased Base Salary amount
shall become the minimum level of Annual Salary for the
Executive. The Annual Base Salary shall be paid no
less frequently than in equal monthly installments.
(ii) Annual Bonus. During the Employment
Period, the Executive shall have an annual bonus
opportunity no less than the applicable target award
percentage in effect for the Executive's employment
level which is in effect immediately prior to the
Commencement Date or, if greater, in effect at any time
after the Commencement Date.
(iii) Long-Term Incentives. During the
Employment Period, the Executive shall be eligible to
participate in all long-term incentive plans, including
the Indiana Energy, Inc. Executive Restricted Stock
Plan (the "Restricted Stock Plan"), practices, policies
and programs to the extent applicable generally to
other peer executives of the Company and its affiliated
companies. The Executive's target award percentage
under the Restricted Stock Plan shall be no less than
the applicable target award percentage in effect for
the Executive's employment level which is in effect
immediately prior to the Commencement Date or, if
greater, the target award percentage in effect for the
Executive any time after the Commencement Date.
(iv) Savings and Retirement Plans. During the
Employment Period, the Executive shall be eligible to
participate in all savings and retirement plans,
practices, policies and programs to the extent
applicable generally to other peer executives of the
Company and its affiliated entities.
(v) Welfare and Other Benefit Plans. During
the Employment Period, the Executive and/or the
Executive's family, as the case may be, shall be
eligible for participation in and shall receive all
benefits under welfare, fringe, change of control
protection, incentive, vacation and other similar
benefit plans, practices, policies and programs
provided by the Company and its affiliated entities
(including, without limitation, medical, prescription,
dental, disability, employee life, group life,
accidental death and travel accident insurance plans
and programs) to the extent applicable generally to
other peer executives of the Company and its affiliated
entities.
(vi) Expenses. During the Employment Period,
the Executive shall be entitled to receive prompt
reimbursement for all reasonable business expenses
incurred by the Executive, in accordance with the
policies of the Company.
(vii) Indemnity. The Executive shall be
indemnified by the Company against claims arising in
connection with the Executive's status as an employee,
officer, director or agent of the Company in accordance
with the Company's indemnity policies for its senior
executives, subject to applicable law.
3. Termination of Employment.
(a) Death or Disability. The Executive's
employment shall terminate automatically upon the
Executive's death during the Employment Period. If the
Company determines in good faith that the Disability
(as defined below) of the Executive has occurred during
the Employment Period, it may give to the Executive
written notice in accordance with Section 9(b) of this
Agreement of its intention to terminate the Executive's
employment. In such event, the Executive's employment
with the Company shall terminate effective on the
thirtieth day after receipt of such notice by the
Executive (the "Disability Commencement Date"),
provided that, within the thirty day period after such
receipt, the Executive shall not have returned to
full-time performance of the Executive's duties. For
purposes of this Agreement, "Disability" shall have the
meaning set forth in the Company's long-term disability
plan.
(b) Cause. The Company may terminate the
Executive's employment during the Employment Period for
Cause. For purposes of this Agreement, "Cause" shall
mean:
(i) intentional gross misconduct
by the Executive damaging in a material way to the
Company, or
(ii) a material breach of this
Agreement, after the Company has given the
Executive notice thereof and a reasonable
opportunity to cure.
(c) Good Reason. The Executive's employment
may be terminated by the Executive for Good Reason.
For purposes of this Agreement and before a Change in
Control (as defined in Section 3(f) below) of the
Company, "Good Reason" shall mean a material breach by
the Company of this Agreement after the Executive has
given the Company notice of the breach and a reasonable
opportunity to cure. After a Change in Control of the
Company, "Good Reason" shall mean, without the
Executive's written consent, (i) a demotion in the
Executive's status, position or responsibilities which,
in his reasonable judgment, does not represent a
promotion from his status, position or responsibilities
as in effect immediately prior to the Change in
Control; (ii) the assignment to the Executive of any
duties or responsibilities which, in his reasonable
judgment, are inconsistent with such status, position
or responsibilities immediately prior to the Change in
Control; or any removal of the Executive from or
failure to reappoint or reelect him to any of such
positions that the Executive had immediately prior to
the Change in Control, except in connection with the
termination of his employment for total and permanent
disability, death or Cause or by him other than for
Good Reason; (iii) a reduction by the Company in the
Executive's base salary as in effect on the date hereof
or as the same may be increased from time to time
during the term of this Agreement or the Company's
failure to increase (within twelve (12) months of the
Executive's last increase in base salary) the
Executive's base salary after a Change in Control in an
amount which at least equals, on a percentage basis,
the average percentage increase in base salary for all
executive and senior Executives of the Company effected
in the preceding twelve (12) months; (iv) the
relocation of the principal executive offices of the
Company or Company affiliate, whichever entity on
behalf of which the Executive performs a principal
function of that entity as part of his employment
services, to a location outside the Indianapolis,
Indiana metropolitan area or the Company's requiring
him to be based at any place other than the location at
which he performed his duties immediately prior to a
Change in Control, except for required travel on the
Company's business to an extent substantially
consistent with his business travel obligations at the
time of a Change in Control; (v) the failure by the
Company to continue in effect any incentive, bonus or
other compensation plan in which the Executive
participates immediately prior to the Change in
Control, including but not limited to the Company's
stock option and restricted stock plans, if any, unless
an equitable arrangement (embodied in an ongoing
substitute or alternative plan), with which he has
consented, has been made with respect to such plan in
connection with the Change in Control, or the failure
by the Company to continue his participation therein,
or any action by the Company which would directly or
indirectly materially reduce his participation therein;
(vi) the failure by the Company to continue to provide
the Executive with benefits substantially similar to
those enjoyed by him or to which he was entitled under
any of the Company's pension, profit sharing, life
insurance, medical, dental, health and accident, or
disability plans in which he was participating at the
time of a Change in Control, the taking of any action
by the Company which would directly or indirectly
materially reduce any of such benefits or deprive him
of any material fringe benefit enjoyed by him or to
which he was entitled at the time of the Change in
Control, or the failure by the Company to provide him
with the number of paid vacation and sick leave days to
which he is entitled on the basis of years of service
with the Company in accordance with the Company's
normal vacation policy in effect on the date hereof;
(vii) the failure of the Company to obtain a
satisfactory agreement from any successor or assign of
the Company to assume and agree to perform this
Agreement; or (viii) any request by the Company that
the Executive participate in an unlawful act or take
any action constituting a breach of the Executive's
professional standard of conduct.
(d) Notice of Termination. Any termination
by the Company for Cause, or by the Executive for Good
Reason, shall be communicated by Notice of Termination
to the other party hereto given in accordance with
Section 9(b) of this Agreement. For purposes of this
Agreement, a "Notice of Termination" means a written
notice which (i) indicates the specific termination
provision in this 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 below) is other than the date
of receipt of such notice, specifies the termination
date (which date shall be not more than thirty days
after the giving of such notice). The failure by the
Executive or the Company to set forth in the Notice of
Termination any fact or circumstance which contributes
to a showing of Good Reason or Cause shall not waive
any right of the Executive or the Company,
respectively, hereunder or preclude the Executive or
the Company, respectively, from asserting such fact or
circumstance in enforcing the Executive's or the
Company's rights hereunder.
(e) Date of Termination. "Date of
Termination" means (i) if the Executive's employment
is terminated by the Company 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 Company other than for
Cause or Disability, the Date of Termination shall be
the date on which the Company notifies the Executive of
such termination and (iii) if the Executive's
employment is terminated by reason of death or
Disability, the Date of Termination shall be the date
of death of the Executive or the Disability
Commencement Date, as the case may be.
(f) Other Termination. The Executive's
employment may be terminated by the Executive
voluntarily, without Good Reason, during a thirty (30)
day period immediately following the first annual
anniversary of a Change in Control of the Company
("Window Period"). For purposes of this Agreement, a
"Change in Control" means:
(i) The acquisition by any
individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Securities
Exchange Act of 1934, as amended (the "Exchange
Act")) (a "Person") of beneficial ownership
(within the meaning of Rule 13d-3 promulgated
under the Exchange Act) of twenty percent (20%) or
more of either (A) the then outstanding shares of
common stock of the Company (the "Outstanding
Company Common Stock") or (B) the combined voting
power of the then outstanding voting securities of
the Company entitled to vote generally in the
election of directors (the "Outstanding Company
Voting Securities"); provided, however, that the
following acquisitions shall not constitute an
acquisition of control: (A) any acquisition
directly from the Company (excluding an
acquisition by virtue of the exercise of a
conversion privilege), (B) any acquisition by the
Company, (C) any acquisition by any employee
benefit plan (or related trust) sponsored or
maintained by the Company or any corporation
controlled by the Company or (D) any acquisition
by any corporation pursuant to a reorganization,
merger or consolidation, if, following such
reorganization, merger or consolidation, the
conditions described in clauses (A), (B) and (C)
of subsection (iii) of this paragraph are
satisfied;
(ii) Individuals who, as of
January 1, 1999, constitute the Board of Directors
of the Company (the "Incumbent Board") cease for
any reason to constitute at least a majority of
the Board of Directors of the Company (the
"Board"); provided, however, that any individual
becoming a director subsequent to the date hereof
whose election, or nomination for election by the
Company's shareholders, was approved by a vote of
at least a majority of the directors then
comprising the Incumbent Board shall be considered
as though such individual were a member of the
Incumbent Board, but excluding, for this purpose,
any such individual whose initial assumption of
office occurs as a result of either an actual or
threatened election contest (as such terms are
used in Rule 14a-11 of Regulation 14A promulgated
under the Exchange Act) or other actual or
threatened solicitation of proxies or consents by
or on behalf of a Person other than the Board; or
(iii) Approval by the
shareholders of the Company of a reorganization,
merger or consolidation, in each case, unless,
following such reorganization, merger or
consolidation, (A) more than sixty percent (60%)
of, respectively, the then outstanding shares of
common stock of the corporation resulting from
such reorganization, merger or consolidation and
the combined voting power of the then outstanding
voting securities of such corporation entitled to
vote generally in the election of directors is
then beneficially owned, directly or indirectly,
by all or substantially all of the individuals and
entities who were the beneficial owners,
respectively, of the Outstanding Company Common
Stock and Outstanding Company Voting Securities
immediately prior to such reorganization, merger
or consolidation in substantially the same
proportions as their ownership, immediately prior
to such reorganization, merger or consolidation,
of the Outstanding Company Stock and Outstanding
Company Voting Securities, as the case may be, (B)
no Person (excluding the Company, any employee
benefit plan or related trust of the Company,
Indiana Gas or such corporation resulting from
such reorganization, merger or consolidation and
any Person beneficially owning, immediately prior
to such reorganization, merger or consolidation
and any Person beneficially owning, immediately
prior to such reorganization, merger or
consolidation, directly or indirectly, twenty
percent (20%) or more of the Outstanding Company
Common Stock or Outstanding Voting Securities, as
the case may be) beneficially owns, directly or
indirectly, twenty percent (20%) or more of,
respectively, the then outstanding shares of
common stock of the corporation resulting from
such reorganization, merger or consolidation or
the combined voting power of the then outstanding
voting securities of such corporation entitled to
vote generally in the election of directors and
(C) at least a majority of the members of the
board of directors of the corporation resulting
from such reorganization, merger or consolidation
were members of the Incumbent Board at the time of
the execution of the initial agreement providing
for such reorganization, merger or consolidation;
(iv) Approval by the shareholders
of the Company of (A) a complete liquidation or
dissolution of the Company or (B) the sale or
other disposition of all or substantially all of
the assets of the Company, other than to a
corporation, with respect to which following such
sale or other disposition (1) more than sixty
percent (60%) of, respectively, the then
outstanding shares of common stock of such
corporation and the combined voting power of the
then outstanding voting securities of such
corporation entitled to vote generally in the
election of directors is then beneficially owned,
directly or indirectly, by all or substantially
all of the individuals and entities who were the
beneficial owners, respectively, of the
Outstanding Company Common Stock and Outstanding
Company Voting Securities immediately prior to
such sale or other disposition in substantially
the same proportion as their ownership,
immediately prior to such sale or other
disposition, of the Outstanding Company Common
Stock and Outstanding Company Voting Securities,
as the case may be, (2) no Person (excluding the
Company and any employee benefit plan or related
trust of the Company, Indiana Gas or such
corporation and any Person beneficially owning,
immediately prior to such sale or other
disposition, directly or indirectly, twenty
percent (20%) or more of the Outstanding Company
Common Stock or Outstanding Company Voting
Securities, as the case may be) beneficially owns,
directly or indirectly, twenty percent (20%) or
more of, respectively, the then outstanding shares
of common stock of such corporation and the
combined voting power of the then outstanding
voting securities of such corporation entitled to
vote generally in the election of directors and
(3) at least a majority of the members of the
board of directors of such corporation were
members of the Incumbent Board at the time of the
execution of the initial agreement or action of
the Board providing for such sale or other
disposition of assets of the Company; or
(v) The closing, as defined in the
documents relating to, or as evidenced by a
certificate of any state or federal governmental
authority in connection with, a transaction
approval of which by the shareholders of the
Company would constitute an "Change in Control"
under subsection (iii) or (iv) of this Section
3(f) of this Agreement.
Notwithstanding anything contained in this
Agreement to the contrary, if the Executive's
employment is terminated before a Change in Control as
defined in this Section 3(f) and the Executive
reasonably demonstrates that such termination (i) was
at the request of a third party who has indicated an
intention or taken steps reasonably calculated to
effect a "Change in Control" and who effectuates a
"Change in Control" or (ii) otherwise occurred in
connection with, or in anticipation of, a "Change in
Control" which actually occurs, then for all purposes
of this Agreement, the date of a "Change in Control"
with respect to the Executive shall mean the date
immediately prior to the date of such termination of
the Executive's employment.
4. Obligations of the Company upon Termination.
(a) Good Reason; Other Than for Cause. If, during the
Employment Period, the Company shall terminate the
Executive's employment other than for Cause, death or
Disability, or the Executive shall terminate employment for
Good Reason or without reason during the Window Period.
(i) The Company shall pay to the Executive
in a lump sum in cash within fifteen calendar days
after the Date of Termination the aggregate of the
amounts set forth in clauses A, B and C below:
A. the sum of (1) the Executive's
Annual Base Salary through the Date of Termination
to the extent not theretofore paid, (2) the
product of (x) the greater of the highest bonus
paid to or the target bonus in effect for the
Executive with respect to the three years ending
prior to the year in which the Date of Termination
occurs (the "Minimum Bonus") and (y) a fraction,
the numerator of which is the number of days in
the current calendar year through the Date of
Termination, and the denominator of which is 365
and (3) any compensation previously deferred by
the Executive (together with any accrued interest
or earnings thereon) and any other nonqualified
benefit plan balances to the extent not
theretofore paid (the sum of the amounts described
in clauses (1), (2), and (3) shall be hereinafter
referred to as the "Accrued Obligations");
provided, however, that for purposes of this
Section 4, Base Salary shall include any elective
salary reductions in effect for the Executive
under any tax qualified or non-qualified deferred
compensation plan maintained by the Company; and
B. the amount equal to the
product of (1) three or, if less, the number of
years remaining in the Executive's Employment
Period at the Date of Termination, rounded to the
nearest twelfth (1/12th) of a year, and (2) the
sum of (x) the Executive's Annual Base Salary and
(y) the Minimum Bonus; and
C. an amount equal to the excess
of (a) the actuarial equivalent of the benefit
under the Company's qualified defined benefit
retirement plan or such other qualified defined
benefit pension plan in which the Executive
participates, if any (the "Retirement Plan")
(utilizing actuarial assumptions no less favorable
to the Executive than those in effect under the
Company's Retirement Plan immediately prior to the
Commencement Date), and any excess or supplemental
retirement plan in which the Executive
participates (together, the ASERP") which the Ex
ecutive would receive if the Executive's
employment continued for the duration of the
Employment Period at the Date of Termination
assuming for this purpose that all accrued
benefits are fully vested, and, assuming that the
Executive's compensation during the duration of
the Employment Period is the sum of the Annual
Base Salary and Minimum Bonus over (b) the
actuarial equivalent of the Executive's actual
benefit (paid or payable), if any, under the
Retirement Plan and the SERP as of the Date of
Termination;
(ii) any restricted stock and any other
stock awards under the Restricted Stock Plan or any
other Company sponsored plan or arrangement that were
outstanding immediately prior to the Commencement Date
("Prior Stock Awards") shall become immediately vested
and/or exercisable, as the case may be;
(iii) for the duration of the Employment
Period at the Date of Termination, or such longer
period as may be provided by the terms of the
appropriate plan, program, practice or policy, the
Company shall continue benefits to the Executive and/or
the Executive's family at least equal to those which
would have been provided to them in accordance with the
welfare Plans, programs, practices and Policies
described in section 2(b)(v) of this Agreement if the
Executive's employment had not been terminated or, it
more favorable to the Executive, as in effect generally
at any time thereafter with respect to other peer
executives of the Company and its affiliated companies
and their families; provided, however, that if the
Executive becomes reemployed with another employer and
is eligible to receive medical or other welfare
benefits under another employer provided plan, the
medical and other welfare benefits described herein
shall be secondary to those provided under such other
plan during such applicable period of eligibility. For
purposes of determining eligibility (but not the time
of commencement of benefits) of the Executive for
retiree benefits pursuant to such plans, practices,
programs and policies, the Executive shall be
considered to have remained employed for the duration
of the Employment Period after the Date of Termination
and to have retired on the last day of such period; and
(iv) to the extent not theretofore paid or
provided, the Company shall timely pay or provide to
the Executive any other amounts or benefits required to
be paid or provided or which the Executive is entitled
to receive under any plan, program, policy or practice
or contract or agreement of the Company and its
affiliated companies, excluding any severance plan or
policy except to the extent that such plan or policy
provides, in accordance with its terms, benefits with a
value in excess of the benefits payable to the
Executive under this Section 4 (such other amounts
and benefits shall be hereinafter referred to as the
"Other Benefits").
(b) Cause; Other than for Good Reason. If the
Executive's employment shall be terminated for Cause or the
Executive terminates employment without Good Reason or not
during the Window Period, this Agreement shall terminate
without further obligations to the Executive other than the
obligation to pay to the Executive (x) Accrued Obligations
less the amount determined under Section 4(a)(i)A(2) hereof,
and (y) Other Benefits, in each case to the extent
theretofore unpaid.
(c) Death . If the Executive's employment is termi
nated by reason of the Executive's death during the
Employment Period, this Agreement shall terminate without
further obligations to the Executive's legal representatives
under this Agreement, other than for payment of Accrued
Obligations and the timely payment or provision of Other
Benefits. Accrued Obligations shall be paid to the
Executive's estate or beneficiary, as applicable, in a lump
sum in cash within 30 days of the Date of Termination.
(d) Disability. If the Executive's employment is
terminated by reason of the Executive's Disability during
the Employment Period, this Agreement shall terminate
without further obligations to the Executive, other than for
payment of Accrued Obligations and the timely payment or
provision of Other Benefits. Accrued Obligations shall be
paid to the Executive in a lump sum in cash within 30 days
of the Date of Termination. With respect to the provision
of Other Benefits, the term Other Benefits as utilized in
this Section 4(d) shall include, and the Executive shall be
entitled after the Disability Commencement Date to receive,
disability and other benefits as in effect generally with
respect to other peer executives of the Company and its
affiliated companies and their families.
5. Confidential Information; Noncompetition.
(a) The Executive shall hold in a fiduciary capacity
for the benefit of the Company all secret or confidential
information, knowledge or data relating to the Company or
any of its affiliated companies, and their respective
businesses, which shall have been obtained by the Executive
during the Executive's employment by the Company or any of
its affiliated companies and which shall not be or become
public knowledge (other than by acts by the Executive or
representatives of the Executive in violation of this
Agreement). After termination of the Executive's employment
with the Company, the Executive shall not, without the prior
written consent of the Company or as may otherwise be
required by law or legal process (provided the Company has
been given notice of and opportunity to challenge or limit
the scope of disclosure purportedly so required),
communicate or divulge any such information, knowledge or
data to anyone other than the Company and those designated
by it.
(b) In the event of a termination of the Executive by
the Company for Cause or by the Executive before a Change in
Control and without Good Reason, until the second
anniversary of the Executive's Date of Termination, the
Executive will not directly or indirectly, own, manage,
operate, control or participate in the ownership,
management, operation or control of, or be connected as an
officer, employee, partner, director or otherwise with, or
have any financial interest in, any business which competes,
or that is planning to compete, with the utility business of
the Company or any of its affiliates in:
(i) Indiana;
(ii) Ohio, Michigan, Illinois or Kentucky;
and
(iii) the United States.
The parties expressly agree that the terms of this limited
non-competition provision under this section are reasonable,
enforceable, and necessary to protect the Company's
interests, and are valid and enforceable. In the unlikely
event, however, that a court of competent jurisdiction were
to determine that any portion of this limited
non-competition provision is unenforceable, then the parties
agree that the remainder of the limited non-competition
provision shall remain valid and enforceable to the maximum
extent possible.
(c) Specific Enforcement/Injunctive Relief. The
Executive agrees that it would be difficult to measure
damages to the Company from any breach of the covenants
contained in Subsection (b) above, but that such damages
from any breach would be great, incalculable and
irremediable, and that damages would be an inadequate
remedy. Accordingly, the Executive agrees that the Company
may have specific performance of the terms of this Agreement
in any court permitted by this Agreement. The parties agree
however, that specific performance and the "add back"
remedies described above shall not be the exclusive
remedies, and the Company may enforce any other remedy or
remedies available to it either in law or in equity
including, but not limited to, temporary, preliminary,
and/or permanent injunctive relief.
6. Full Settlement. 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. In no
event shall the Executive be obligated to seek other employment
or take any other action by way of mitigation of the amounts
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. The Company agrees to pay
as incurred, to the full extent permitted by law, all legal fees
and expenses which the Executive may reasonably incur as a result
of any contest (regardless of the outcome thereof) by the
Company, the Executive or others of the validity or
enforceability of, or liability under, any provision of this
Agreement or any guarantee of performance thereof (including as a
result of any contest by the Executive about the amount of any
payment pursuant to this Agreement), plus in each case interest
on any delayed payment at the applicable Federal rate provided
for in Section 7872(f)(2)(A) of the Internal Revenue Code of
1986, as amended (the "Code").
7. Successors.
(a) This Agreement is personal to the Executive and
without the prior written consent of the Company shall not
he 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) This Agreement shall inure to the benefit of and
he binding upon the Company and its successors and assigns.
(c) The Company will 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 business and/or assets as
aforesaid which assumes and agrees to perform this Agreement
by operation of law, or otherwise.
8. Certain Additional Payments by the Company.
(a) Anything in this Agreement to the contrary or any
termination of this Agreement notwithstanding, in the event
it shall be determined that any payment or distribution or
benefit made or provided by the Company or its affiliates to
or for the benefit of the Executive whether pursuant to this
Agreement or otherwise, and determined without regard to any
additional payments required under this Section 8 (a "Pay
ment") would be subject to the excise tax imposed by Section
4999 of the Code or any interest or penalties are incurred
by the Executive with respect to such excise tax (such
excise tax, together with any such interest and penalties,
are hereinafter collectively referred to as the "Excise
Tax"), then the Executive shall be entitled to receive an
additional payment (a "Gross- Up Payment") in an amount such
that after payment by the Executive of all taxes (including
any interest or penalties imposed with respect to such
taxes), including, without limitation, any income taxes (and
any interest and penalties imposed with respect thereto) and
Excise Tax imposed upon the Gross-Up Payment, the Executive
retains an amount of the Gross-Up Payment equal to the
Excise Tax imposed upon the Payments.
(b) Subject to the provisions of Section 8(c), all
determinations required to be made under this Section 8, in
cluding whether and when a Gross-Up Payment is required and
the amount of such Gross-Up Payment and the assumptions to
be utilized in arriving at such determination, shall be made
by the Company's independent auditor (the "Accounting Firm")
which shall provide detailed supporting calculations both to
the Company and the Executive within 15 business days of the
receipt of notice from the Executive that there has been a
Payment, or such earlier time as is requested by the
Company. All fees and expenses of the Accounting Firm shall
be borne solely by the Company. Any Gross-Up Payment, as
determined pursuant to this Section 8, shall be paid by the
Company to the Executive within five days of the receipt of
the Accounting Firm's determination. Any determination by
the Accounting Firm shall be binding upon the Company and
the Executive. As a result of the uncertainty in the
application of Section 4999 of the Code at the time of the
initial determination by the Accounting Firm hereunder, it
is possible that Gross-Up Payments which will not have been
made by the Company should have been made ("Underpayment"),
consistent with the calculations required to be made
hereunder. In the event that the Company exhausts its
remedies pursuant to Section 8(c) and the Executive
thereafter is required to make a payment of any Excise Tax,
the Accounting Firm shall determine the amount of the
Underpayment that has occurred and any such Underpayment
shall be promptly paid by the Company to or for the benefit
of the Executive.
(c) The Executive shall notify the Company in writing
of any claim by the Internal Revenue Service that, if
successful, would require the payment by the company of the
Gross-Up Payment. Such notification shall be given as soon
as practicable but no later than ten business days after the
Executive is informed in writing of such claim and shall
apprise the Company of the nature of such claim and the date
on which such claim is requested to be paid. The Executive
shall not pay such claim prior to the expiration of the
30-day period following the date on which it gives such
notice to the Company (or such shorter period ending on the
date that any payment of taxes with respect to such claim is
due). If the Company notifies the Executive in writing prior
to the expiration of such period that it desires to contest
such claim, the Executive shall:
(i) give the Company any information
reasonably requested by the Company relating to such
claim,
(ii) take such action in connection with
contesting such claim as the Company shall reasonably
request in writing from time to time, including,
without limitation, accepting legal representation with
respect to such claim by an attorney reasonably
selected by the Company,
(iii) cooperate with the Company in good
faith in order effectively to contest such claim, and
(iv) permit the Company to participate in any
proceedings relating to such claim;
provided, however, that the Company shall bear and pay
directly all costs and expenses (including additional
interest and penalties) incurred in connection with such
contest and shall indemnify and hold the Executive harmless,
on an after-tax basis, for any Excise Tax or income tax
(including interest and penalties with respect thereto)
imposed as a result of such representation and payment of
costs and expenses. Without limitation on the foregoing
provisions of this Section 8(c), the Company shall control
all proceedings taken in connection with such contest and,
at its sole option, may pursue or forgo any and all
administrative appeals, proceedings, hearings and
conferences with the taxing authority in respect of such
claim and may, at its sole option, either direct the
Executive to pay the tax claimed and xxx for a refund or
contest the claim in any permissible manner, and the
Executive agrees to prosecute such contest to a
determination before any administrative tribunal, in a court
of initial jurisdiction and in one or more appellate courts,
as the Company shall determine; provided, however, that if
the Company directs the Executive to pay such claim and xxx
for a refund, the Company shall advance the amount of such
payment to the Executive, on an interest-free basis and
shall indemnify and hold the Executive harmless, on an
after-tax basis, from any Excise Tax or income tax
(including interest or penalties with respect thereto)
imposed with respect to such advance or with respect to any
imputed income with respect to such advance; and further
provided that any extension of the statute of limitations
relating to payment of taxes for the taxable year of the
Executive with respect to which such contested amount is
claimed to he due is limited solely to such contested
amount. Furthermore, the Company's control of the contest
shall be limited to issues with respect to which a Gross-Up
Payment would be payable hereunder and the Executive shall
be entitled to settle or contest, as the case may be, any
other issue raised by the Internal Revenue Service or any
other taxing authority.
(d) If, after the receipt by the Executive of an
amount advanced by the Company pursuant to Section 8(c), the
Executive becomes entitled to receive any refund with
respect to such claim, the Executive shall (subject to the
Company's complying with the requirements of Section 8(c))
promptly pay to the Company the amount of such refund
(together with any interest paid or credited thereon after
taxes applicable thereto). If, after the receipt by the
Executive of an amount advanced by the Company pursuant to
Section 8(c), a determination is made that the Executive
shall not be entitled to any refund with respect to such
claim and the Company does not notify the Executive in
writing of its intent to contest such denial of refund prior
to the expiration of 30 days after such determination, then
such advance shall be forgiven and shall not be required to
he repaid and the amount of ouch advance shall offset, to
the extent thereof, the amount of Gross-Up Payment required
to he paid.
9. Miscellaneous.
(a) This Agreement shall be governed by and construed
in accordance with the laws of Indiana, without reference to
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
or modified otherwise than by a written agreement executed
by the parties hereto or their respective successors and
legal representatives.
(b) All notices and other communications hereunder
shall be in writing and shall he 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:
Name
Address
If to the Company:
Attention: General Counsel
Indiana Energy, Inc.
0000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000-0000
or to such other address as either party shall have
furnished to the other in writing in accordance herewith.
Notice and communications shall be effective when actually
received by the addressee,
(c) The invalidity or unenforceability of any pro
vision of this Agreement shall not affect the validity or
enforceability of any other provision of this Agreement.
(d) The Company may withhold from any amounts payable
under this Agreement such Federal, state, local or foreign
taxes as shall be required to be withheld pursuant to any
applicable law or regulation.
(e) On and after the Commencement Date, this Agreement
shall supersede any other agreement between the parties with
respect to the subject matter hereof and any such agreement
shall be deemed terminated without any remaining obligations
of either party thereunder.
IN WITNESS WHEREOF, the Executive has hereunto set the
Executive's hand and, pursuant to the authorization from its
Board of Directors, the Company has caused these presents to be
executed in its name on its behalf, all as of the day and year
first above written.
/s/ Xxxx X. Xxxxxxx
Executive Officer
December 10, 1998
Date
Indiana Energy, Inc.
By /s/ Xxxx X. Xxxxxxx III
Chairman of Compensation Committee
of Board of Directors
December 9, 1998
Date
