EXHIBIT 10.1
EMPLOYMENT AGREEMENT
THIS AGREEMENT is entered into by and between XXXXXXX X. XXXXXXXXX (the
Executive) and AGL SERVICES COMPANY (the "Company").
WHEREAS, the Company and the Executive desire to set forth in a written
agreement the complete terms and conditions pursuant to which the Executive
shall be employed by the Company; and
WHEREAS, the Company and the Executive intend that this Agreement will
supersede any and all previous oral or written employment agreements between the
Company and the Executive;
NOW, THEREFORE, in consideration of the covenants and agreements
hereinafter set forth, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:
1.
DEFINITIONS
As used in this Agreement, the following words and/or phrases shall
have the meanings set forth below unless a different meaning plainly is required
by the context:
1.1 AGLR or AGL Resources Inc. shall mean AGL Resources Inc., the parent
corporation of the Company.
1.2 Agreement shall mean this Employment Agreement between the Company and
the Executive.
1.3 Affiliate shall mean any parent, brother-sister or subsidiary
corporation of the Company, any joint venture in which the Company owns at least
a 50 percent interest, and any partnership, limited liability partnership or
limited liability corporation in which the Company or any of its wholly-owned
subsidiaries owns at least a 50 percent interest.
1.4 Board shall mean the Board of Directors of the Company.
1.5 Cause shall mean (i) the Executive's willful and continued failure to
perform any substantial duty of his position with the Company or any of its
Affiliates (other than any such failure resulting from incapacity due to
Disability) which is not cured within thirty (30) days following written notice
by the Company; (ii) the Executive's willful engagement in any illegal conduct
or gross misconduct which is materially and demonstrably injurious to the
Company; (iii) the Executive's engagement in any activity that is in conflict of
interest or competitive with the Company or any of its Affiliates; (iv)
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1.6 the Executive's engaging in any act of fraud or dishonesty against the
Company or any of its Affiliates or any material breach of federal or state
securities or commodities laws or regulations; (v) the Executive's being
intoxicated or in possession of any illegal substance in the workplace; (vi) the
Executive's engaging in an act of assault or other act of violence; (vii) the
Executive's harassment of any individual in the workplace based on age, gender
or other protected status or class or violation of any policy of the Company
regarding harassment, but only following an investigation by an independent
third party into the harassment; and (viii) the Executive's conviction for any
felony or misdemeanor charge (other than charges related to routine traffic
violations).
1.7 Code shall mean the Internal Revenue Code of 1986, as amended.
1.8 Company shall mean AGL Services Company, its successors and assigns.
1.9 Disability shall mean a physical or mental impairment that prohibits
the Executive from performing the essential duties of his position, is expected
to be of a long and continued duration, and for which he becomes eligible to
receive benefits under the Company's long-term disability plan.
1.10 Effective Date shall mean April 1, 2001.
1.11 ERISA shall mean the Executive Retirement Income Security Act of 1974,
as amended.
1.12 Executive shall mean Xxxxxxx X. Xxxxxxxxx, a resident of the State of
Texas.
1.13 Good Reason shall mean (i) a demotion of the Executive's position or
any action by the Company which results in diminution of the Executive's
authority, duties or responsibilities as in effect on the Effective Date (other
than any isolated, insubstantial and inadvertent action not taken in bad faith);
(ii) a reduction in the Executive's base salary or benefits (unless such
reduction in benefits applies to all executives providing services to the
Company, or in the case of benefits provided only to Sequent, all executives
providing services to Sequent, so long as the Executive is provided with a
substantially equivalent benefit in replacement of such lost benefit); or (iii)
a material breach by the Company of its obligations hereunder which is not cured
within thirty (30) days following written notice by the Executive.
1.14 Proprietary Information shall mean (i) information that meets the
definition of "trade secret" under the laws of the State of Texas, which shall
include but is not limited to any formula, pattern, device or compilation of
information which is used in one's business and which affords an opportunity to
obtain an advantage over competitors who do not know it or use it, including but
not limited to chemical compounds, a process of manufacturing, treating or
preserving materials, a pattern for a machine or other device, a list of
customers, customer contact information, market strategies, blueprints and
drawings, strategic and/or marketing plans, (ii) scientific or technical
information, design, process, procedure, formula or improvement that is secret
and of value, and (iii) information that the Company takes reasonable efforts to
protect from disclosure and from which the Company derives actual or potential
economic value due to its confidential nature, including, but not limited to,
technical or nontechnical data, formulas, complications, programs, devices,
methods, techniques, drawings, processes, financial data, lists of actual or
potential customers, price lists and/or pricing policies, business plans,
customer and vendor records,
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training and operations materials and memoranda, personnel records, financial
information relating to the business of the Company, accounts, customers,
vendors, employees and affairs of the Company, and any information marked
"confidential" by the Company.
1.15 Restricted Territory shall mean (i) any state in which AGLR or its
Affiliates has a regulated-utility operation, which may change from time to
time, but as of the Effective Date of this Agreement are Georgia, Tennessee and
Virginia; and (ii) any state in which AGLR or its Affiliates (including Sequent)
owns or has contractual rights to purchase, move or use natural gas-related
assets, including but not limited to commodity rights, storage facilities,
interstate pipelines, intrastate pipelines, intrastate distribution facilities,
liquified natural gas facilities, propane-air facilities or other peaking
facilities, which may change from time to time, but as of the Effective Date of
this Agreement are Georgia, Tennessee, Virginia, Texas, Louisiana, Mississippi,
Alabama, North Carolina, Michigan and Pennsylvania.
1.16 Services Agreement shall mean that certain Services Agreement, dated
January 1, 2001, between the Company and AGL Energy Services, Inc. (now known as
Sequent Energy Management, LLC), under which the Company agrees to provide the
Executive's services to Sequent Energy Management, LLC.
1.17 Sequent shall mean Sequent Energy Management, LLC, which is an
Affiliate of the Company.
1.18 Term shall mean the period during which this Agreement remains in
force, as described in Section 2.3.
1.19 Termination Date shall mean the date of the Executive's termination of
employment.
2.
DUTIES AND AUTHORITY
2.1 Duties and Authority. The Executive is engaged and agrees to perform
services for and on behalf of the Company, and pursuant to the terms of the
Services Agreement, the Executive shall perform services as the President and
Chief Executive Officer of Sequent, and shall report directly to the Chief
Executive Officer of AGL Resources Inc. The Executive agrees to perform such
duties diligently and efficiently and in accordance with the reasonable
directions of the CEO of AGLR. The Executive shall conduct himself at all times
in a business-like and professional manner as appropriate for his position and
shall represent the Company in all respects in compliance with good business and
ethical practices. In addition, the Executive shall be subject to and abide by
the policies and procedures of the Company applicable to personnel of the
Company, as may be adopted from time to time.
2.2 Best Efforts. During the Term of this Agreement, the Executive shall devote
his full attention, energies and best efforts to rendering services on behalf of
the Company (or Affiliates thereof), and shall not engage in any outside
employment without the express written consent of the Board. Notwithstanding the
foregoing, (i) the Executive is not prohibited from investing or trading in
stocks, bonds, commodities or other forms of investment, including real
property, so long as the Executive does not "participate" (within
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the meaning of Treas. Reg. Section 1.469-5(f) and 1.469-5T(f)) in such
investments, and the Executive shall at all times be subject to the terms and
conditions of the Risk Management Policy of Sequent, and (ii) the Executive may
serve on corporate, civic or charitable boards or committees and deliver
lectures or fulfill speaking engagements 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.
2.3 Term. The initial Term of this Agreement shall commence on the
Effective Date and shall continue until the close of business on the date three
and one-half (3-1/2) years from the Effective Date, subject to earlier
termination as provided in this Agreement. This Agreement shall be deemed to be
extended automatically for an additional one-year Term on the same terms and
conditions unless either the Company or the Executive gives contrary written
notice to the other party at least six (6) months prior to the end of the
initial Term hereof or at least ninety (90) days prior to the end of each
subsequent one-year Term thereafter.
3.
COMPENSATION AND BENEFITS
3.1 Signing Incentive. As an inducement for the Executive to enter into
employment and to execute this Agreement, the Company agrees to grant a
nonqualified stock option for 80,000 shares of AGLR's common stock as of the
Effective Date of this Agreement with an exercise price of $21.91 per share (the
fair market value of such stock on the Effective Date), under the terms of the
AGL Resources Inc. Officer Incentive Plan. This nonqualified stock option shall
become exercisable 50 percent on each anniversary of the Effective Date.
3.2 Annual Base Salary. The Company shall pay to the Executive as
compensation for his services provided hereunder a base salary of $280,000.00
per year ("Base Salary"), payable in accordance with the Company's normal
payroll procedures. The Company shall review the Executive's Base Salary
annually, and in its sole discretion, may increase the Executive's Base Salary
from year to year. The annual review of the Executive's salary shall take into
consideration competitive market practices in addition to evaluations of the
Executive's performance.
3.3 Annual Incentive Compensation. The Executive shall participate in the
Company's Annual Incentive Compensation Program for officers of Sequent, the
terms and conditions of which are subject to change from time to time, but which
shall provide each year for a "target" level bonus for the Executive equal to
(i) no less than 55 percent of his annual Base Salary, plus (ii) one half of one
percent (0.5%) of "net book value" of Sequent (as more fully defined in the
Annual Incentive Compensation Program for officers of Sequent). Prior to the
beginning of each fiscal year, the Executive may elect to receive any incentive
compensation to which he becomes entitled for such year to be payable to him in
the form of a nonqualified stock option or stock appreciation right (at the
Company's discretion) in lieu of cash payment; provided, that the conversion of
the cash amount shall be made at the time that payment would have been made by
dividing the cash amount by the Black-Scholes binomial factor then applicable to
the common stock of AGLR, and multiplying the quotient by 125% (e.g., a cash
payment of $100,000 converts to ($100,000/3.65 = 27,397.26) (27,397.26 x 1.25 =
34,246.57 shares subject to option/SAR - with Black-Scholes binomial factor
subject to change). Any nonqualified stock option or
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stock appreciation right granted pursuant to the Executive's election under the
Annual Incentive Compensation Plan shall be 100% immediately exercisable.
3.4 Long-Term Incentives. The Executive shall participate in the Company's
long-term incentive program for executives, the terms and conditions of which
are subject to change at any time, or in any other long-term incentive
arrangement that the Company may provide for him. The Company agrees that grants
and awards for the Executive under the long-term incentive program will have an
annualized value of no less than 120 percent of his annual Base Salary.
3.5 Employee Benefit Plans and Policies. The Executive shall be entitled to
participate in each employee benefit plan, policy or arrangement which is
sponsored, maintained or contributed to by the Company and in which current
executive officers of the Company may participate, in accordance with the terms
and provisions of such plans; provided, however, that the Executive shall not
participate in the Annual Team Performance Incentive Plan of the Company because
he will be eligible to participate in the Company's Annual Incentive
Compensation Plan for officers of Sequent. Contributions by the Executive to
such plans shall be required only to the extent required of other executive
officers of the Company.
3.6 Additional Life Insurance Coverage. In addition to the life insurance
coverage available under the Company's employee benefit plans, the Company
agrees to provide the Executive with additional term life insurance coverage on
his life during the Term of this Agreement, with death benefits payable to his
designated beneficiary, in the face amount of $1,000,000. The Employee
understands and agrees that he will be deemed to have taxable income in the
amount of the premium costs for this coverage. In consideration for this
coverage, the Executive agrees that the Company may, at its discretion, obtain
key man life insurance coverage on his life, with death benefits payable to the
Company.
3.7 Vacation. Executive shall be entitled to four (4) weeks of paid
vacation time for each calendar year.
3.8 Executive Allowance Fund. The Executive shall be eligible for $15,000
for each of the calendar years 2001 and 2002 under the terms of the Company's
Executive Allowance Fund.
3.9 Expense Reimbursement. The Company shall reimburse the Executive for
reasonable and necessary travel and other business related expenses, including
entertainment expenses, incurred by him in performance of the business of the
Company in accordance with the standard expense reimbursement practices and
policies applicable to Sequent, as in existence from time to time, subject to
such dollar limitations and verification and record keeping requirements as may
be established from time to time by the Sequent or the Company.
3.10 Withholding, FICA, FUTA, Etc. Any amount to be paid to the Executive
under the provisions of this Agreement which represents taxable income to him
shall be subject to, and reduced by, any applicable federal, state or local
taxes imposed by law, included, but not limited to, taxes imposed under Subtitle
C of the Code.
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4.
RESTRICTIVE COVENANTS
4.1 Use and Return of Documents and Property. Executive acknowledges that
in the course of his employment with the Company, he will have the opportunity
to inspect and use certain property, both tangible and intangible, of the
Company and its Affiliates. All such property shall remain the exclusive
property of the Company and its Affiliates, and Executive does not have and in
the future shall not have any right or interest in such property. Executive
shall use Company property only during employment and only in the performance of
his job and to further the Company's interests, and he will not remove Company
property from the Company's premises except to the extent necessary to perform
his duties and to the extent approved by the Company, either expressly or
generally under its policies. Promptly upon the Executive's Termination Date,
Executive shall return to the Company all of the Company's memoranda, notes,
records, data, books, sketches, computer hardware and software programs,
audio-visual materials, correspondence, lists, every piece of information
recorded in any form, and all other tangible property.
4.2 New Developments. Any discovery, invention, process or improvement made
or discovered by the Executive during the Term of this Agreement in connection
with or in any way affecting or relating to the business of the Company or any
of its Affiliates (as then carried on or under active consideration) shall
forthwith be disclosed to the Company and shall belong to and be the absolute
property of the Company. The preceding sentence does not apply to any invention
for which no equipment, supplies, facility, or trade secret information of the
Company was used and which was developed entirely on the Executive's own time,
unless the invention relates directly to the business of the Company or its
Affiliates or to its or their actual or demonstrably anticipated research or
development, or the invention results from any work performed by the Executive
for the Company.
4.3 Covenant Not to Compete. Executive agrees that, during the Term of his
employment under this Agreement and for a period of one (1) year following the
Termination Date, regardless of the reasons for the Executive's termination of
employment, Executive will not, directly or indirectly, expressly or tacitly,
for himself or on behalf of any entity anywhere in the Restricted Territory, (i)
act as an officer, manager, advisor, executive, controlling shareholder, or
consultant to any business in which his duties at or for such business include
oversight of or actual involvement in providing services which are competitive
with the services or products being provided or which are being produced or
developed by the Company or its Affiliates, or are under investigation by
Sequent, the Company, or any of its Affiliates on the Termination Date, (ii)
recruit investors on behalf of an entity which engages in activities which are
competitive with the services or products being provided or which are being
produced or developed by the Company or its Affiliates, or are under
investigation by the Company or any of its Affiliates on the Termination Date,
or (iii) become employed by such an entity in any capacity which would require
Executive to carry out, in whole or in part, the duties Executive has performed
for the Company which are competitive with the services or products being
provided or which are being produced or developed by the Company or any of its
Affiliates, or are under active investigation by the Company or any of its
Affiliates on the Termination Date. This covenant shall apply to any services or
products under investigation by the Company or any of its Affiliates on the
Termination Date only to the extent that the Executive initiated, promoted,
participated in, or otherwise had knowledge of such investigation. Executive
acknowledges that because of the nationwide nature of the Company's (including
its Affiliates) business, this restriction
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will prevent the Executive from acting in any of the foregoing capacities for
any competing entity wherever located within the Restricted Territory and that
this scope is reasonable in light of the business of the Company and its
Affiliates. Notwithstanding any other provision of this Section 4.3, in the
event the Executive's employment under this Agreement is terminated due to the
Company's notice of its desire not to renew the Agreement at the end of the
initial or any later Term of the Agreement, then the Executive shall not be
subject to the noncompetition provisions of this Section 4.3.
4.4 Nonsolicitation of Customers, Clients and Suppliers. Executive agrees
that during the Term of his employment with the Company under this Agreement, he
will not, directly or indirectly, without the Company's prior written consent,
contact any customer, client or supplier of the Company or any of its Affiliates
for business purposes unrelated to furthering the business of the Company or its
Affiliates. Executive further agrees that for a period of two (2) years
following his Termination Date, he will not directly or indirectly, (i) contact,
solicit or divert, or attempt to contact, solicit, divert or take away, any
customer, client or supplier of the Company or its Affiliates for purposes of,
or with respect to, providing a customer, client or supplier to a competing
business; or (ii) take any affirmative action with a customer, client or
supplier of the Company or its Affiliates for purposes of providing a customer,
client or supplier to a business competing with the Company or its Affiliates.
The prohibitions of the preceding sentence shall apply only to customers,
clients and suppliers of the Company with whom the Executive had Material
Contact on the Company's behalf during the twelve months immediately preceding
the Termination Date. For purposes of this Agreement, the Executive had
"Material Contact" with a customer, client or supplier if (a) he had business
dealings with the customer, client or supplier on the Company's behalf; (b) he
was responsible for supervising or coordinating the dealings between the Company
and the customer, client or supplier; or (c) he obtained Proprietary Information
about the customer, client or supplier as a result of his association with the
Company.
4.5 Nonsolicitation of Employees. The Executive agrees that during his
employment with the Company and for two (2) years after his Termination Date,
the Executive will not, directly or indirectly, solicit or attempt to recruit or
hire any employees of the Company or its Affiliates who were employed by the
Company or its Affiliates at any time during the last year of the Executive's
employment with the Company and who are actively employed by the Company or its
Affiliates at the time of the solicitation or attempted solicitation, to provide
services similar to those performed by the employee for the Company on behalf
of, or for the purpose of engaging in employment with, a competitor of the
Company.
4.6 Nondisclosure of Trade Secrets and Proprietary Information. Except to
the extent reasonably necessary for Executive to perform his duties for the
Company, the Executive shall not, directly or indirectly, furnish or disclose to
any person, or use in any way, any trade secrets of the Company or its
Affiliates, for so long as such trade secrets remain "trade secrets" under
applicable state law. Except to the extent reasonably necessary for Executive to
perform his duties for the Company, Executive shall not, during the Term of his
employment with the Company and for a period of two (2) years following the
Executive's Termination Date, directly or indirectly, furnish or disclose to any
person, or use in any way, for personal benefit or the benefit of others, any
Proprietary Information of the Company or its Affiliates. Notwithstanding the
foregoing, nothing in this Section 4.6 will prevent the Executive from
disclosing information as compelled by a court of law or
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judicial process, or to the extent that the information has already been
publicly disclosed by the Company independent of the actions of the Executive.
4.7 Reasonableness. Executive has carefully considered the nature and
extent of the restrictions upon him and the rights and remedies conferred on the
Company under this Agreement, and Executive hereby acknowledges and agrees that:
(a) the restrictions and covenants contained herein, and the rights
and remedies conferred upon the Company, are necessary to protect the goodwill
and other value of the business of the Company;
(b) the restrictions placed upon Executive hereunder are fair and
reasonable in time and territory, will not prevent him from earning a
livelihood, and place no greater restraint upon the Executive than is reasonably
necessary to secure the business and goodwill of the Company;
(c) the Company is relying upon the restrictions and covenants
contained herein in continuing to make available to Executive information
concerning the business of the Company;
(d) Executive's employment hereunder places him in a position of
confidence and trust with the Company and its employees, customers and
suppliers; and
(e) the provisions of this section shall be interpreted so as to
protect the Proprietary Information, and to secure for the Company the exclusive
benefits of the work performed on behalf of the Company by the Executive under
this Agreement, and not to unreasonably limit his ability to engage in
employment and consulting activities in noncompetitive areas which do not
endanger the Company's legitimate interests expressed in this Agreement.
4.8 Remedy for Breach. Executive acknowledges and agrees that his breach of
any of the covenants contained in this Article of this Agreement will cause
irreparable injury to the Company and that remedies at law available to the
Company for any actual or threatened breach by the Executive of such covenants
will be inadequate and that the Company shall be entitled to specific
performance of the covenants in this Article or injunctive relief against
activities in violation of this Article by temporary or permanent injunction or
other appropriate judicial remedy, writ or order, without the necessity of
proving actual damages. This provision with respect to injunctive relief shall
not diminish the right of the Company to claim and recover monetary damages
against the Executive for any breach of this Agreement, in addition to
injunctive relief. The Executive acknowledges and agrees that the covenants
contained in this Article shall be construed as independent of any other
provision of this or any other contract between the parties hereto, and that the
existence of any claim or cause of action by the Executive against the Company,
whether predicated upon this or any other contract, shall not constitute a
defense to the enforcement by the Company of said covenants.
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5.
TERMINATION OF EMPLOYMENT
5.1 Termination by Company.
(a) Termination by the Company For Cause. During the Term of this
Agreement, the Company may terminate the Executive's employment for "Cause,"
effective immediately upon written notice to Executive. Upon such a termination
for "Cause," the Executive shall be entitled to any accrued but unpaid Base
Salary and unreimbursed expenses through the Termination Date, but shall not be
entitled to any other compensation, bonus, severance pay or post-termination
benefits, other than as required by law. Any outstanding restricted stock, stock
options, stock appreciation rights, performance grants or other equity-based
compensation grants or awards held by the Executive shall be governed by the
terms of the plan under which such grants or awards were made.
(b) Termination by the Company Without Cause. During the Term of this
Agreement, the Company may terminate the Executive's employment for any reason
other than "Cause" upon sixty (60) days' prior written notice to the Executive.
Upon such a termination, in addition to any earned but unpaid Base Salary, any
accrued but unused vacation (if normally payable under the Company's policies),
any earned but unpaid annual bonus for the fiscal year which ended prior to the
Termination Date, and unreimbursed expenses through the Termination Date, the
Executive shall be entitled to severance pay in the amount of the sum of (a) the
greater of (i) twelve (12) months of his monthly Base Salary then in effect or
(ii) the Base Salary payable for the remainder of then-remaining Term, and (b) a
prorated portion of the annual bonus otherwise payable to the Executive pursuant
to the Annual Incentive Compensation Program for officers of Sequent for the
year in which the termination occurs (calculated on actual performance for the
year), with the proration calculated based on the number of days the Executive
was actively employed by the Company during that year. Any outstanding
restricted stock, stock options, stock appreciation rights, performance grants
or other equity-based compensation grants or awards held by the Executive shall
be governed by the terms of the plans under which they were granted; provided,
that each stock option held by the Executive which was granted to him as a
result of his voluntary conversion of an annual cash bonus payable to him under
the Annual Incentive Compensation Program for officers of Sequent shall continue
to become exercisable according to its schedule as granted, and, to the extent
exercisable, shall remain exercisable, for a period ending on the earlier of (i)
the original expiration date of the grant or award; or (ii) the date six (6)
years following the Termination Date. In addition, the benefits provided to the
Executive and his covered dependents pursuant to Sections 3.5 and 3.6 shall
continue to be provided until the later of (i) the last day of the then-
remaining Term, or (ii) the date one (1) year following the Termination Date, in
the same manner and on the same cost basis as if the Executive remained an
active employee (subject to any limitations on such continuation imposed by
insurance carriers). The severance pay based on Base Salary provided for in this
subsection shall be paid in a single sum cash payment within thirty (30) days
after the Termination Date, contingent upon the Executive's execution of a
general release, as described in Section 5.4. The severance pay based on annual
bonus shall be payable to the Executive at the time that bonuses are paid to
other Sequent executives for the year in which the termination occurs,
contingent upon the Executive's execution of a release of all claims related to
the bonus. The severance pay and benefits provided for herein shall be in lieu
of any and all other payments, bonuses or other compensation to which the
Executive may have been entitled.
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(c) Termination by Executive for Good Reason. During the Term of this
Agreement, the Executive may terminate his employment for "Good Reason" upon
sixty (60) days' prior written notice to the Company. Upon such a termination,
the Executive shall be entitled to severance pay and benefits identical to, and
subject to the same conditions applicable to, those provided in Section 5.1(b)
above.
5.2 Termination of Agreement by Reason of Executive's Death or Disability.
This Agreement shall terminate immediately upon the termination of the
Executive's employment upon the death of the Executive or upon written notice
from the Company to the Executive if he shall at any time become incapacitated
by reason of a Disability. Any outstanding restricted stock, stock options,
stock appreciation rights, performance grants or other equity-based compensation
grants or awards held by the Executive shall be governed by the terms of the
plans under which they were granted; provided that each stock option held by the
Executive which was granted to him as a result of his voluntary conversion of an
annual cash bonus payable to him under the Annual Incentive Compensation Program
for officers of Sequent shall continue to become exercisable according to its
schedule as granted, and, to the extent exercisable, shall remain exercisable,
for a period ending on the earlier of (i) the original expiration date of the
grant or award; or (ii) the date six (6) years following the Termination Date.
In addition, the benefits provided to the Executive and his covered dependents
pursuant to Sections 3.5 and 3.6 (as applicable) shall continue to be provided
until the later of (i) the last day of the then-remaining Term, or (ii) the date
one (1) year following the Termination Date, in the same manner and on the same
cost basis as if the Executive remained an active employee (subject to any
limitations on such continuation imposed by insurance carriers). The Company
shall not have any further obligations to the Executive, the Executive's estate,
heirs or other legal representatives.
5.3 Other Benefits After Termination Date. Except for the payments and
benefits, if any, provided under this Article 5, no other benefits, compensation
or other remuneration of any type, whether taxable or nontaxable, shall be
payable to the Executive after his Termination Date, except as required by law
or by the applicable terms and provisions of any employee benefit plan
applicable to the Executive.
5.4 General Release. The Executive agrees that in the event of any
termination of this Agreement that results in the payment of severance pay
pursuant to this Section 5, prior to the payment of any such severance pay, as a
condition to receipt of and as consideration for such payment, the Executive
shall sign a general release of any and all claims that he or his heirs and
assigns may have against the Company and its related parties related to his
employment, in substantially the form attached hereto as Exhibit A.
5.5 Continuity Agreement. Contemporaneously with the execution of this
Agreement, AGLR and the Executive shall enter into a Continuity Agreement in
substantially the form attached hereto as Exhibit B, with a term commensurate
with that provided to other Section 16(b) officers of AGLR. In the event the
Executive is party to such a change-in-control Continuity Agreement with the
Company or AGLR at the time of his termination of employment and if the terms
and conditions of the Continuity Agreement become operative as to the
Executive's termination of employment, then the Executive shall be entitled to
receive the greater of (i) the severance pay and benefits due or payable under
this Agreement or (ii) the severance pay and benefits due or payable under the
Continuity Agreement, but not both.
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6.
MISCELLANEOUS PROVISIONS
6.1 Invalidity of Any Provision. It is the intention of the parties hereto
that the provisions of this Agreement shall be enforced to the fullest extent
permissible under the laws of each state and jurisdiction in which such
enforcement is sought, but that the unenforceability (or the modification to
conform with such laws) of any provision hereof shall not render unenforceable
or impair the remainder of this Agreement which shall be deemed amended to
delete or modify, as necessary, the invalid or unenforceable provisions. The
parties further agree to alter the balance of this Agreement in order to render
the same valid and enforceable. The terms of the restrictive covenant provisions
of this Agreement shall be deemed modified to the extent necessary to be
enforceable and, specifically, without limiting the foregoing, if the term of
the applicable restrictive covenant is too long to be enforceable, it shall be
modified to encompass the longest term which is enforceable and, if the scope of
the geographic area of the applicable restrictive covenant is too great to be
enforceable, it shall be modified to encompass the greatest area that is
enforceable.
6.2 Indictment of the Executive. In the event the Executive is indicted
under federal or state law during the Term of the Agreement, the Executive shall
be placed on a leave of absence by the Company during the period of indictment.
During the leave of absence, the Executive shall continue to be paid his Base
Salary under the Agreement and shall continue to participate in the Company's
employee benefit plans, but he shall not be eligible for any bonus or other
incentive payment, grant or award during such leave (including payments, grants
or awards under the Annual Incentive Compensation Plan and the Long-Term
Incentive Plan). If the Executive is acquitted of all charges on which the
indictment was based or if all charges are dropped or are dismissed, the
Executive shall be paid any payments, grants or awards (under the Annual
Incentive Compensation Plan and the Long-Term Incentives Plan) that he would
have received but for the leave of absence and will be reinstated to active
employment. If the Executive is convicted of the charges, the Company shall
terminate the Executive's employment for "Cause" as defined in Section 1.5
hereof.
6.3 Applicable Law. This Agreement shall be construed and enforced in
accordance with the laws of the State of Texas.
6.4 Arbitration. Any claim or dispute arising under this Agreement shall be
subject to arbitration; provided that either party may seek injunctive relief
through court action. The arbitration shall be conducted in Houston, Texas, in
accordance with the Employment Dispute Rules of the American Arbitration
Association and the Federal Arbitration Act, 9 U.S.C. ss.1, et. seq. The
arbitrator(s) shall be authorized to award both liquidated and actual damages,
in addition to injunctive relief, but no punitive damages. The arbitrator(s) may
also award attorney's fees and costs, without regard to any restriction on the
amount of such award under Texas or other applicable law, but until such
decision, each party shall bear the full expense of its fees and costs related
to the arbitration. Such an award shall be binding and conclusive upon the
parties hereto, subject to 9 U.S.C. ss.10. Each party shall have the right to
have the award made the judgment of a court of competent jurisdiction.
Xxxxxxxxx Employment Agreement
Page 11
6.5 Waiver of Breach. The waiver of a breach of any provision of this
Agreement by a party hereto shall not operate or be construed as a waiver of any
subsequent breach by the other party hereto.
6.6 Successors and Assigns. This Agreement shall inure to the benefit of
the Company and its Affiliates, and their respective successors and assigns.
This Agreement shall inure to the benefit of and be enforceable by the
Executive's estate and/or legal representatives.
6.7 Assignment of Agreement. This Agreement is not assignable by the
Executive, but shall be freely assignable by the Company to any successor. 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.
6.8 Notices. All notices, demands and other communications hereunder shall
be in writing and shall be delivered in person or deposited in the United States
mail, certified or registered, with return receipt requested, as follows:
(a) if to Executive: Xx. Xxxxxxx X. Xxxxxxxxx
00 Xxxxxxxx Xxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
(b) if to Company: AGL Services Company
Attention: Xx. Xxxx X. Xxxxxxx
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxx Xxxxx
Xxxxxxx, XX 00000
6.9 Entire Agreement. This Agreement, in addition to any Continuity
Agreement between the Executive and the Company or AGLR, contains the entire
agreement of the parties with respect to the subject matter hereof. All
understandings and agreements heretofore made between the parties hereto with
respect to the subject matter of this Agreement (other than the Continuity
Agreement) are merged into this document which alone fully and completely
expresses their agreement. This Agreement shall be deemed to have been drafted
by the parties on an equal basis. This Agreement may not be changed orally but
only by an agreement in writing signed by both parties.
6.10 Survival of Provisions. The provisions of Article 4 - Restrictive
Covenants shall survive termination of this Agreement.
6.11 Captions. The captions appearing in this Agreement are inserted only
as a matter of convenience and in no way define, limit, construe or describe the
scope or intent of any provisions of this Agreement or in any way affect this
Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
under seal as of this 19th day of June 2001.
Xxxxxxxxx Employment Agreement
Page 12
EXECUTIVE:
/s/ Xxxxxxx X. Xxxxxxxxx
-----------------------------------
XXXXXXX X. XXXXXXXXX
[signatures continued]
COMPANY:
AGL SERVICES COMPANY
By:
/s/ P. G. Rosput
-----------------------------------
Xxxxx X. Rosput
President and Chief Executive Officer
[THIS AGREEMENT HAS BEEN EXECUTED IN DUPLICATE.]
ATL: 4299747.3
Xxxxxxxxx Employment Agreement
Page 13
EXHIBIT "A"
SAMPLE OF GENERAL RELEASE LANGUAGE
GENERAL RELEASE. The Employee agrees, for himself, his spouse, heirs, executor
or administrator, assigns, insurers, attorneys and other persons or entities
acting or purporting to act on his behalf, to irrevocably and unconditionally
release, acquit and forever discharge the Company, its affiliates, subsidiaries,
directors, officers, employees, shareholders, partners, agents, representatives,
predecessors, successors, assigns, insurers, attorneys, benefit plans sponsored
by the Company and said plans' fiduciaries, agents and trustees, from any and
all actions, cause of action, suits, claims, obligations, liabilities, debts,
demands, contentions, damages, judgments, levies and executions of any kind,
whether in law or in equity, known or unknown, which the Employee has, has had,
or may in the future claim to have against the Company by reason of, arising out
of, related to, or resulting from Employee's employment with the Company or the
termination thereof. This release specifically includes without limitation any
claims arising in tort or contract, any claim based on wrongful discharge, any
claim based on breach of contract, any claim arising under federal, state or
local law prohibiting race, sex, age, religion, national origin, handicap,
disability or other forms of discrimination, any claim arising under federal,
state or local law concerning employment practices, and any claim relating to
compensation or benefits. This specifically includes, without limitation, any
claim which the Employee has or has had under Title VII of the Civil Rights Act
of 1964, as amended, the Age Discrimination in Employment Act, as amended, the
Americans with Disabilities Act, as amended, and the Employee Retirement Income
Security Act of 1974, as amended. It is understood and agreed that the waiver of
benefits and claims contained in this Section does not include a waiver of the
right to payment of any vested, nonforfeitable benefits to which the Employee or
a beneficiary of the Employee may be entitled under the terms and provisions of
any employee benefit plan of the Company which have accrued as of the Separation
Date and does not include a waiver of the right to benefits and payment of
consideration to which the Employee may be entitled under this Agreement. The
Employee acknowledges that he is only entitled to the additional benefits and
compensation set forth in this Agreement, and that all other claims for any
other benefits or compensation are hereby waived, except those expressly stated
in the preceding sentence.
Xxxxxxxxx Employment Agreement
Page 14
June 11, 2001
Xx. Xxxxxxx X. Xxxxxxxxx
00 Xxxxxxxx Xxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Dear Xxxx:
This letter is to confirm our agreement regarding your personal
investment in AGL Resources Inc. common stock. We understand that you may make
open market purchases of AGL's common stock through your broker (or a broker
recommended by AGL) during the period from April 1, 2001 through July 31, 2001
(the "Purchase Period"). Please note that your purchases may not occur on July 1
through July 26, which is a "blackout" period for AGL.
AGL agrees that it will pay you a bonus equal to the difference between
the average gross purchase prices you paid for the purchase of shares of AGL
common stock (including commissions up to $.05 per share) during the Purchase
Period and the $21.91 fair market value of the stock as of April 1, 2001. This
bonus shall apply to shares you actually purchased during the Purchase Period,
up to a maximum of 200,000 shares. We agree that this bonus will be added to
your bonus under the Annual Incentive Compensation Plan for Sequent for the
fiscal year ending September 30, 2001, and shall be paid in the same form that
you have previously elected for such bonus.
Very truly yours,
/s/ P. G. Rosput
--------------------------
P. G. Rosput
