EMPLOYMENT AGREEMENT
Exhibit
10(j)
This
Employment Agreement is made effective as of the 1st day of
September, 1998, by and between Texas Utilities Services Inc. (the “Employer”)
and Xxxx Xxxxxx, an individual (the “Employee”). The term Employer shall also
include any successor employer of Employee if such successor employer is within
the Texas Utilities Company System.
1. Employment. The
Employer hereby agrees to employ Employee and Employee hereby agrees to serve
the Employer, subject to the terms and conditions set forth herein.
2. Term.
Employee’s employment with the Employer shall commence September 1, 1998, and
will terminate at the will of either of the parties hereto.
3. Initial
Title and Duties. Employee
shall initially serve the Employer as its Vice President and Treasurer, and
shall perform such duties and tasks as he may be called upon by the Employer to
perform from time to time. Employee will endeavor to promote the business
affairs and business interests of the Employer and will devote all of his
working time and attention to the Employer.
4. Compensation.
(a) Base
Salary. As
compensation for his services hereunder, Employee shall initially receive a base
salary of $15,833.34 per month, payable in equal installments at such periods as
shall from time to time be established by the Employer as regular payroll
periods. Employee’s base salary shall be subject to adjustment from time to time
at the discretion of the Employer.
(b) Signing
Bonus. Upon
commencement of Employee’s employment hereunder, Employer shall pay Employee a
one-time, special bonus in the amount of $50,000.
(c) Annual
Bonus Opportunities. In his
capacity as Vice President and Treasurer of Employer, Employee shall be entitled
to participate in the Texas Utilities Company System Annual Incentive Plan
("AIP") which provides eligible employees with annual performance-based bonus
opportunities. Under the terms of the AIP, one-half of the annual awards are
paid to participants in cash and one-half of the annual awards are deferred
under the Texas Utilities Company System Deferred and Incentive Compensation
Plan. Employer agrees that, if AIP awards made to Employee for either the 1998
or 1999 plan year are less than $75,000, the difference between the amount of
the award actually made under the AIP for such year and $75,000 shall be paid by
Employer to Employee in cash at or near the time that the AIP award for such
year is made.
Employee
understands and agrees that, in addition to any limitations provided for in the
AIP, the bonus payments provided for above shall be forfeited and shall not be
made if Employee resigns or is terminated for Cause (as defined below) prior to
the date that AIP awards are distributed for the applicable plan year. Except as
otherwise specifically provided for herein, “Cause” shall mean Employee’s (i)
death, (ii) inability to perform his duties and responsibilities hereunder on a
consistent day-to-day basis by reason of a physical or emotional disability,
(iii) any material action or material failure to act on the part of Employee
which may result in material injury to the assets, business prospects or
reputation of the Employer or any affiliate of Employer, including without
limitation a violation of a published employment policy or law, or (iv) failure
to satisfactorily perform the duties and discharge the responsibilities assigned
to him in accordance with this Agreement.
(d) Other
Benefits. During
the period of Employee’s employment hereunder, Employee shall be entitled to
participate in all of the Employer’s employee benefit plans, arrangements and
fringe benefit policies to the extent he is qualified to do so, subject to the
terms, conditions and limitations of such plans, arrangements and policies, as
they may be amended, altered or terminated from time to time. For purposes of
Employee’s participation in certain of Employer’s executive compensation plans,
Employee shall be deemed to be a “corporate officer” of Employer. With respect
to the application of Employer’s vacation policy, Employee shall be entitled to
the number of vacation days provided for under such policy as if he had attained
fifteen (15) years of service with Employer as of the date of this
Agreement.
(e) Special
Deferred Compensation. In
addition to the other compensation provided
for in
this Agreement and in recognition of Employee’s forfeiture of compensation from
his former employer by virtue of his employment with Employer hereunder,
Employer agrees to provide Employee with deferred compensation under the
following terms and conditions.
Employee
shall be awarded the equivalent of a theoretical number of full and fractional
shares of the common stock (“Stock”) of Texas Utilities Company, (“Phantom
Units”) determined by dividing $300,000 by the market value per share of the
Stock on the effective date of this Agreement. The Phantom Units shall be
segregated and maintained in four (4) separate and equal theoretical record
keeping accounts (the “Accounts”). If and when dividends are paid on the Stock,
each Account shall be credited with additional Phantom Units in an amount equal
to the value of the number of full and fractional shares of Stock which could
have been purchased with the amount of the dividend that would have been paid if
Stock were held in the Account. For purposes of crediting this theoretical
dividend to the Accounts, each Phantom Unit shall be equivalent to one share of
Stock. In the event of any reorganization, recapitalization, reclassification,
stock split, reverse stock split, combination, share exchange, or other similar
event involving the Stock, an appropriate adjustment shall be made in the
Accounts. Beginning in 1999 and continuing thereafter for the following three
(3) succeeding years, one of the Accounts shall effectively be liquidated in
each such year and Employer shall pay Employee cash in an amount equal to the
value of the liquidated Account, such that the value of one Account is paid in
each of the years 1999, 2000, 2001 and 2002. The cash value to be paid upon the
liquidation of each Investment Account shall be determined by multiplying the
number of
Phantom Units that exist in the applicable Account at June 30th of the
applicable year by the average market value used to value incentive compensation
payments for participants in the Employer’s Deferred and Incentive Compensation
Plan (“DICP”) for payments made from such plan in such year. Each such cash
payment shall be made at the time that incentive awards are paid to participants
in the DICP during such year.
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In the
event of Employee’s resignation or termination for Cause (except for Employee’s
death or disability), Employee shall forfeit any right to receive any payments
under this Section which have not been made prior to the date of such cessation
of employment. In the event that Employee is terminated by Employer without
Cause, Employee shall be entitled to receive an amount, if any, equal to 50% of
the cash value in the Accounts remaining after the application of the offset
provision of Section 5 below.
5. Loan.
Employer agrees to loan Employee an aggregate sum of $300,000.00 on the
following terms and conditions. Such loan shall bear interest at a rate of ____%
per annum and shall be repaid in four (4) equal annual installments of $_____
each on _____, 1999, _____, 2000, _____ 2001 and _____ 2002. Concurrently with
the final installment on _____, 2002, the entire amount of the unpaid principal
on the loan, together with all accrued and unpaid interest thereon, shall be due
and payable. The loan shall be evidenced by, and subject to the terms of, a
Promissory Note in the form attached hereto as Exhibit "A".
In the
event that Employer terminates Employee without Cause, prior to the repayment in
full of the loan, the value of the undistributed Accounts provided in subsection
(e) above (such value to be determined as of the date of such resignation or
termination) shall be applied against, and shall offset, the outstanding
indebtedness under the loan.
6. Provision
for Company Automobile. Employee
shall be entitled to participate in the Employer’s executive automobile policy
on the same basis as other executives of the Employer subject to the terms and
conditions of such automobile policy as it may be amended, altered or terminated
from time to time.
7. Provision
for Temporary Housing and Travel Expenses. The
parties understand that Employee currently resides in New York and that he
desires to maintain his family’s New York residence for some period of time
after he commences his employment with Employer. In order to help accommodate
Employee in this regard and assist him with temporary local housing, Employer
shall, in addition to the compensation provided for above, reimburse Employee’s
reasonable expenses for rent and utilities associated with a temporary apartment
in the Dallas area for a period of one year beginning with the commencement of
Employee’s employment hereunder. Employer shall also provide Employee with a
travel allowance for the first ten months of Employee’s employment hereunder in
an aggregate amount of $12,000 to assist Employee in travel to and from his home
in New York. Reimbursement of such travel expenses shall be made in a manner
consistent with Employer’s expense reimbursement policy.
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8. Relocation
Benefits. In
connection with Employee’s relocation to Dallas, Texas, in order to commence his
employment hereunder, he shall be entitled to receive relocation benefits
pursuant to the provisions of Employer’s standard relocation
policy.
9. Country
Club Membership. Employer
shall provide Employee with a country club membership and a luncheon club
membership at club(s) which are mutually agreeable to Employer and Employee. Any
initiation or similar fees, as well as the monthly membership dues for such club
membership(s) shall be paid by Employer.
10. Severance
Payment Upon Termination Without Cause. In the
event that Employer terminates Employee’s employment hereunder without Cause,
Employee shall, in addition to any other compensation or benefits to which
Employee may be entitled by reason of such termination, be entitled to receive a
one-time single lump sum severance payment in an amount equal to Employee’s
annualized base salary under paragraph 4(a) hereof. Such severance payment shall
be paid to Employee as soon as reasonably practicable following such
termination.
11. Deductions
and Nonalienation of Benefits. Employee
shall be required to pay promptly on demand, by payroll deduction or otherwise,
the amount required to be withheld by Employer for income and employment taxes
in respect of amounts paid under this agreement. No right, benefit or payment
hereunder shall be subject to anticipation, alienation, sell, assign, pledge,
encumbrance or charge, and any attempt to anticipate, alienate, sell, assign,
pledge, encumber or charge the same shall be null and void. No right, benefit or
payment hereunder shall in any manner or subject to, voluntarily or
involuntarily, the debts, contracts, liabilities or torts of Employee or be
otherwise subject to any execution, garnishment, attachment, insolvency,
bankruptcy or legal proceedings of any character or legal sequestration, levy or
sale. If Employee or any other beneficiary hereunder shall become bankrupt or
attempt to anticipate, alienate, sell, assign, pledge, encumber or charge any
right, benefit or payment hereunder, such right, benefit or payment may be
terminated at any time by the Employer without liability or further
obligation.
12. Entire
Agreement. This
Agreement contains the complete understanding and agreement between the parties
and supersedes any and all other agreements, understandings, or communications
of any kind, either oral or in writing, between the parties hereto with respect
to the subject matter hereof. Each party to this agreement acknowledges that no
representations, inducements, promises, or agreements, orally or otherwise, have
been made by any party, or anyone acting on behalf of any party, which are not
embodied herein, and that no other agreement, statement, or promise with respect
to the subject matter of this Agreement shall be valid or binding. Nothing in
this agreement shall be construed as conferring any right upon Employee to
continued employment by the Employer. Any modification of this Agreement will be
effective only if it is in writing signed by both of the parties
hereto.
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13. Severability. If any
provision in this Agreement is held by a court of competent jurisdiction to be
invalid, void, or unenforceable, the remaining provisions shall nevertheless
continue in full force without being impaired or invalidated in any
way.
14. Successors. This
Agreement shall be binding upon and inure to the benefit of Employee, his heirs,
beneficiaries and personal representatives, and the Employer and any successor
of the Employer, but neither this Agreement, nor any of the rights or
obligations of either party hereunder may be assigned, in whole or in part,
except Employer may assign this Agreement to any affiliate of
Employer.
15. Notices. Any
notices to be given hereunder by either party to the other may be effected by
personal delivery in writing, by facsimile or by mail, registered or certified,
postage prepaid to the current address of the other party with return receipt
requested. Notices delivered personally or by facsimile shall be deemed
communicated as of actual receipt, mailed notices shall be deemed communicated
as of three (3) days after mailing.
16. Governing
Law. This
Agreement shall be governed by and construed in accordance with the laws of the
State of Texas.
EXECUTED
in Dallas, Texas effective as of the day and year first above
written.
EMPLOYER:
TEXAS
UTILITIES SERVICES INC.
By:
/s/
Xxxxxxx X.
XxXxxxx
EMPLOYEE:
/s/
Xxxx
Xxxxxx
Xxxx Xxxxxx
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