Exhibit 10.2
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT ("Agreement") made and entered into
as of the 12th day of October, 1996, by and between Mineral
Energy Company (the "Company"), a California corporation,
and Xxxxxxx X. Xxxx (the "Executive");
WHEREAS, the Executive is currently serving as President
and Chief Executive Officer of Enova, Inc., a California
corporation ("Enova"), and the Company desires to secure the
continued employment of the Executive in accordance
herewith;
WHEREAS, pursuant to the Agreement and Plan of Merger
(the "Merger Agreement"), dated as of October 12, 1996,
among, inter alia, Enova, Pacific Enterprises, a California
corporation ("Pacific Enterprises"), and the Company, the
parties thereto have agreed to a merger (the "Merger")
pursuant to the terms thereof;
WHEREAS, the Executive is willing to commit himself to be
employed by the Company on the terms and conditions herein
set forth and thus to forego opportunities elsewhere; and
WHEREAS, the parties desire to enter into this Agreement,
as of the Effective Date (as hereinafter defined), setting
forth the terms and conditions for the employment
relationship of the Executive with the Company during the
Employment Period (as hereinafter defined),
NOW, THEREFORE, IN CONSIDERATION of the mutual premises,
covenants and agreements set forth below, it is hereby
agreed as follows:
1. Employment and Term.
(a) Employment. The Company agrees to employ the
Executive, and the Executive agrees to be employed by the
Company, in accordance with the terms and provisions of this
Agreement during the term thereof (as described below).
(b) Term. The term of the Executive's employment under
this Agreement shall commence (the "Effective Date") as of
the closing date (the "Closing Date") of the Merger, as
described in the Merger Agreement, and shall continue until
the earlier of the Executive's Mandatory Retirement Age (as
defined herein) or the fifth anniversary of the Effective
Date (such term being referred to hereinafter as the
"Employment Period"); provided, however, that commencing on
the fourth anniversary of the Effective Date (and each
anniversary of the Effective Date thereafter) the term of
this Agreement shall automatically be extended for one
additional year, unless, prior to such date, the Company or
the Executive shall give written notice to the other party
that it or he, as the case may be, does not wish to so
extend this Agreement; and further provided, however, that
if the Merger Agreement is terminated, then, at the time of
such termination, this Agreement shall be deemed cancelled
and of no force or effect and the Executive shall continue
to be subject to such agreements and arrangements that were
in effect prior to the Closing Date. As a condition to the
Merger, the parties hereto agree that the Company shall be
responsible for all of the premises, covenants and
agreements set forth in this Agreement.
(c) Mandatory Retirement. In no event shall the term of
the Executive's employment hereunder extend beyond the end
of the month in which the Executive's 65th birthday occurs
(the "Mandatory Retirement Age").
2. Duties and Powers of Executive.
(a) Position.
(i) Period A. During the period commencing on the
Effective Date and ending on the earlier of September 1,
2000 or the second anniversary of the Effective Date
("Period A"), the Executive shall serve as the Vice Chairman
of the Board of Directors of the Company (the "Board"),
President and Chief Operating Officer of the Company with
such authority, duties and responsibilities with respect to
such position as set forth below in subsection(b) hereof.
In this capacity, the Executive shall be a member of the
office of
the Chairman (which shall be an office held jointly by the
Executive and the Chief Executive Officer/Chairman of the
Board) ("Office of the Chairman")and shall report only to
the Chief Executive Officer/Chairman of the Board. The
presidents and principal executive officers of the Company's
regulated and nonregulated businesses and the senior-most
person in charge of each of the Company's policy units shall
report directly to the Office of the Chairman.
(ii) Period B. During the period, if any, commencing on
the second anniversary of the Effective Date and ending on
September 1, 2000("Period B"), the Executive shall be
nominated to the position of, and if elected shall serve as,
the Vice Chairman of the Board, Chief Executive Officer and
President of the Company with such authority, duties and
responsibilities with respect to such position as set forth
below. In this capacity, the Executive shall report only to
the Board. The presidents and chief executive officers of
the Company's regulated and nonregulated businesses and the
senior-most person in charge of each of the Company's policy
units shall report directly to the Executive.
(iii) Period C. During the period, if any, commencing
September 1, 2000 and ending on the expiration date of the
Agreement ("Period C"),the Executive shall be nominated to
the position of, and if elected shall serve as, Chairman,
Chief Executive Officer and President of the Company with
such authority, duties and responsibilities with respect to
such position as set forth below. In this capacity, the
Executive shall report only to the Board. The presidents and
chief executive officers of the Company's regulated and
nonregulated businesses and the senior-most person in charge
of each of the Company's policy units shall report directly
to the Executive.
(b) Duties.
(i) Chief Executive Officer. The duties of the Chief
Executive Officer of the Company shall include but not be
limited to directing the overall business, affairs and
operations of the Company, through its officers, all of whom
shall report directly or indirectly to the Office of the
Chairman or, if there is no Office of the Chairman, to the
Chief Executive Officer. (ii) Chief Operating Officer.
The duties of the Chief Operating Officer of the Company
shall include, but not be limited to, directing the day-to-
day business, affairs and operations of the Company, under
the supervision of the Chief Executive Officer and (to the
extent the Chief Executive Officer is not also the
President) the President. (iii) President. The duties of
the President of the Company shall include, but not be
limited to, assisting the Chief Executive Officer (to the
extent the President is not also the Chief Executive
Officer) in directing the overall business, affairs and
operations of the Company. (iv) Chairman of the Board.
The Chairman of the Board shall be a director and shall
preside at meetings of the Board and meetings of the
shareholders. The Chairman shall be responsible for Board
and shareholder governance and shall have such duties and
responsibilities as are customarily assigned to such
positions. (v) Vice Chairman of the Board. The Vice
Chairman of the Board shall be a director and, in the
absence of the Chairman, shall preside at meetings of the
Board and meetings of shareholders. The Vice Chairman shall
assist the Chairman in his responsibility for Board and
shareholder governance and shall have such duties as are
customarily assigned to such position.
(c) Board Membership. The Executive shall be a member
of the Board on the first day of the Employment Period, and
the Board shall propose the Executive for re-election to the
Board throughout the Employment Period.
(d) Attention. During the Employment Period, and
excluding any periods of vacation and sick leave to which
the Executive is entitled, the Executive shall devote full
attention and time during normal business hours to the
business and affairs of the Company and, to the extent
necessary to discharge the responsibilities assigned to the
Executive under this Agreement, use the Executive's best
efforts to carry out such responsibilities faithfully and
efficiently. It shall not be considered a violation of the
foregoing for the Executive to serve on corporate, industry,
civic or charitable boards or committees, so long as such
activities do not interfere with the performance of the
Executive's responsibilities as an employee of the Company
in accordance with this Agreement.
3. Compensation.
It is the Board's intention to provide the Executive with
compensation opportunities that, in total, are at a level
that is consistent with that provided by comparable
companies to executives of similar levels of responsibility,
expertise and corporate and individual performance as
determined by the compensation committee of the Board. In
this regard, the Executive shall receive the following
compensation for his services hereunder to the Company:
(a) Base Salary. During the Employment Period, the
Executive's annual base salary ("Annual Base Salary") shall
be payable in accordance with The Company's general payroll
practices. During Period A, the Executive's Annual Base
Salary shall in no event be less than $645,000. During
Period B and Period C, if The Executive is elected to the
position of Chief Executive Officer, the Executive's Annual
Base Salary shall in no event be less than the annual base
salary of the Executive's predecessor as Chief Executive
Officer of the Company. Subject to Section 4(d)(ii), the
Board in its discretion may from time to time direct such
upward adjustments in the Executive's Annual Base Salary as
the Board deems to be necessary or desirable, including,
without limitation, adjustments in order to reflect in-
creases in the cost of living and the Executive's
performance. Any increase in Annual Base Salary shall not
serve to limit or reduce any other obligation of the Company
under this Agreement.
(b) Incentive Compensation. Subject to Section
4(d)(ii), during the Employment Period, the Executive shall
participate in annual incentive compensation plans and long-
term incentive compensation plans of the Company and, to the
extent appropriate, the Company's subsidiaries (which
long-term incentive compensation plans may include plans
offering stock options, restricted stock and other long-term
incentive compensation and all such annual and long-term
plans to be hereinafter referred to as the "Incentive
Compensation Plans") and will be granted awards thereunder
providing him with the opportunity to earn, on a year-by-
year basis, annual and long-term incentive compensation (the
"Incentive Compensation Awards")at least equal (in terms of
target, maximum and minimum awards expressed as a percentage
of Annual Base Salary) to the greater of the Executive's
opportunities that were in effect prior to the Effective
Date and the awards granted to the Chief Executive Officer
of the Company under the Incentive Compensation Plans during
Period A. Any equity awards granted to the Executive may be
granted, at the Executive' selection, to trusts established
for the benefit of members of the Executive's family. With
respect to incentive compensation awards granted prior to
the Effective Date, the Executive shall be entitled to
retain such awards in accordance with their terms, which
shall be appropriately adjusted as a result of the Merger.
(c) Retirement and Welfare Benefit Plans. In addition
to the benefits provided under Section 3(b), during the
Employment Period and so long as the Executive is employed
by the Company, he shall be eligible to participate in all
other savings, retirement and welfare plans, practices,
policies and programs applicable generally to employees
and/or senior executive officers of the Company and its
domestic subsidiaries, except with respect to any benefits
under any plan, practice, policy or program to which the
Executive has waived his rights in writing. To the extent
that benefits payable or provided to the Executive under
such plans are materially less favorable on a benefit by
benefit basis than the benefits that would have been payable
or provided to the Executive under comparable Enova tax-
qualified retirement plans, executive retirement plans,
split dollar and other executive life insurance arrangements
in which the Executive was a participant (based on the terms
of such plans as of the Effective Date), the Executive shall
be entitled to benefits pursuant to the terms of this
Agreement equal to the excess of the benefits provided under
the applicable Enova plans over the benefits provided under
the comparable Company plans.
(d) Expenses. The Company shall reimburse the Executive
for all expenses, including those for travel and
entertainment, properly incurred by him in the performance
of his duties hereunder in accordance with policies
established from time to time by the Board.
(e) Fringe Benefits and Perquisites. During the
Employment Period and so long as the Executive is employed
by the Company, he shall be entitled to receive fringe
benefits and perquisites in accordance with the plans,
practices, pro-grams and policies of the Company and, to the
extent appropriate, the Company's subsidiaries from time to
time in effect, commensurate with his position.
4. Termination of Employment.
(a) Death or Disability. The Executive's employment
shall terminate upon the Executive's death or, at the
election of the Board or the Executive, by reason of
Disability (as herein defined) during the Employment Period;
provided, however, that the Board may not terminate the
Executive's employment hereunder by reason of Disability
unless at the time of such termination there is no
reasonable expectation that the Executive will return to
work within the next ninety (90) day period. For purposes
of this Agreement, disability ("Disability") shall have the
same meaning as set forth in the Enova long-term disability
plan or its successor.
(b) By the Company for Cause. The Company may terminate
the Executive's employment during the Employment Period for
Cause (as herein defined). For purposes of this Agreement,
"Cause" shall mean (i) the willful and continued failure by
the Executive to substantially perform the Executive's
duties with the Company (other than any such failure
resulting from the Executive's incapacity due to physical or
mental illness or any such actual or anticipated failure
after the issuance of a Notice of Termination for Good
Reason by the Executive pursuant to Section 4(d))or (ii) the
Executive's commission of one or more acts of moral
turpitude that constitute a violation of applicable law
(including but not limited to a felony) which have or result
in an adverse effect on the Company, monetarily or otherwise
or one or more significant acts of dishonesty. For purposes
of clause (i) of this definition, no act, or failure to act,
on the Executive's part shall be deemed "willful" unless
done, or omitted to be done, by the Executive not in good
faith and without reasonable belief that the Executive's
act, or failure to act, was in the best interest of the
Company.
(c) By the Company without Cause. Notwithstanding any
other provision of this Agreement, the Company may terminate
the Executive's employment other than by a termination for
Cause during the Employment Period, but only upon the
affirmative vote of three-fourths (3/4) of the membership of
the Board.
(d) By the Executive for Good Reason. The Executive may
terminate his employment during the Employment Period for
Good Reason (as herein defined). For purposes of this
Agreement, "Good Reason" shall mean the occurrence without
the written consent of the Executive of any one of the
following acts by the Company, or failures by the Company to
act, unless such act or failure to act is corrected prior to
the Date of Termination (as hereinafter defined) specified
in the Notice of Termination (as hereinafter defined) given
in respect thereof:
(i) an adverse change in the Executive's title, authority,
duties, responsibilities or reporting lines as specified in
Section 2(a) and 2(b)of this Agreement; (ii) a reduction
by the Company in (A) the Executive's Annual Base Salary as
in effect on the date hereof or as the same may be in-
creased from time to time or (B) the Executive's aggregate
annualized compensation and benefits opportunities, except,
in the case of both (A) and (B), for across-the-board
reductions similarly affecting all executives (both of the
Company and of any Person (as hereinafter defined) then in
control of the Company) whose compensation is directly
determined by the compensation committee of the Board (and
the compensation committee of the board of directors of any
Person then in control of the Company); provided that, the
exception for across-the-board reductions shall not apply
following a Change in Control (as hereinafter defined);
(iii) the relocation of the Executive's principal place of
employment to a location away from the Company's
headquarters or a substantial increase in the Executive's
business travel obligations outside of the Southern
California area as of the Effective Date, other than any
such increase that (A) arises in connection with
extraordinary business activities of the Company and (B) is
understood not to be part of the Executive's regular duties
with the Company; (iv) the failure by the Company to pay
to the Executive any portion of the Executive's current
compensation and benefits or to pay to the Executive any
portion of an installment of deferred compensation under any
deferred compensation program of the Company within thirty
(30) days of the date such compensation is due; (v) the
failure by the shareholders to elect the Executive to the
Board during the Employment Period; (vi) the failure by
the Board to elect the Executive to the positions of Vice
Chairman of the Board, President and Chief Executive Officer
during Period B, or Chairman of the Board, President and
Chief Executive Officer during Period C; (vii) any
purported termination of the Executive's employment that is
not effected pursuant to a Notice of Termination satisfying
the requirements of Section 4(f); for purposes of this
Agreement, no such purported termination shall be effective;
(viii) the failure by the Company to obtain a satisfactory
agreement from any successor of the Company requiring such
successor to assume and agree to perform the Company's
obligations under this Agreement, as contemplated in Section
11; or (ix) the failure by the Company to comply with any
material provision of this Agreement. Following a Change
in Control (as hereinafter defined), the Executive's
determination that an act or failure to act constitutes Good
Reason shall be presumed to be valid unless such
determination is deemed to be unreasonable by an arbitrator.
The Executive's right to terminate the Executive's
employment for Good Reason shall not be affected by the
Executive's incapacity due to physical or mental illness.
The Executive's continued employment shall not constitute
consent to, or a waiver of rights with respect to, any act
or failure to act constituting Good Reason hereunder.
(e)Change in Control. Change in Control shall mean the
occurrence of any of the following events: (i)Any Person
is or becomes the Beneficial Owner, directly or indirectly,
of securities of the Company (not including in the
securities beneficially owned by such Person any securities
acquired directly from the Company or its affiliates other
than in connection with the acquisition by the Company or
its affiliates of a business) representing twenty percent
(20%) or more of the combined voting power of the Company's
then outstanding securities; or (ii) The following
individuals cease for any reason to constitute a majority of
the number of directors then serving: individuals who, on
the date hereof, constitute the Board and any new director
(other than a director whose initial assumption of office is
in connection with an actual or threatened election contest,
including but not limited to a consent solicitation,
relating to the election of directors of the Company) whose
appointment or election by the Board or nomination for
election by the Company's shareholders was approved or
recommended by a vote of at least two-thirds (2/3) of the
directors then still in office who either were directors on
the date hereof or whose appointment, election or nomination
for election was previously so approved or recommended; or
(iii) There is consummated a merger or consolidation of the
Company or any direct or indirect subsidiary of the Company
with any other corporation, other than (A) a merger or
consolidation which would result in the voting securities of
the Company outstanding immediately prior to such merger or
consolidation continuing to represent (either by remaining
outstanding or by being converted into voting securities of
the surviving entity or any parent thereof), in combination
with the ownership of any trustee or other fiduciary holding
securities under an employee benefit plan of the Company or
any subsidiary of the Company, at least sixty percent (60%)
of the combined voting power of the securities of the
Company or such surviving entity or any parent thereof
outstanding immediately after such merger or consolidation,
or(B) a merger or consolidation effected to implement a
recapitalization of the Company (or similar transaction) in
which no Person is or becomes the beneficial owner, directly
or indirectly, of securities of the Company (not including
in the securities beneficially owned by such Person any
securities acquired directly from the Company or its
affiliates other than in connection with the acquisition by
the Company or its affiliates of a business) representing
twenty percent (20%) or more of the combined voting power of
the Company's then outstanding securities; or (iv) The
shareholders of the Company approve a plan of complete
liquidation or dissolution of the Company or there is
consummated an agreement for the sale or disposition by the
Company of all or substantially all of the Company's assets,
other than a sale or disposition by the Company of all or
substantially all of the Company's assets to an entity, at
least sixty percent (60%) of the combined voting power of
the voting securities of which are owned by shareholders of
the Company in substantially the same proportions as their
ownership of the Company immediately prior to such sale.
"Person" shall have the meaning given in section 3(a)(9) of
the Securities Exchange Act of 1934 (the "Exchange Act"), as
modified and used in sections 13(d) and 14(d) thereof,
except that such term shall not include (i) the Company or
any of its subsidiaries, (ii) a trustee or other fiduciary
holding securities under an employee benefit plan of the
Company or any of its affiliates, (iii) an underwriter
temporarily holding securities pursuant to an offering of
such securities,(iv) a corporation owned, directly or
indirectly, by the shareholders of the Company in
substantially the same proportions as their ownership of
stock of the Company, or(v) a person or group as used in
Rule 13d-1(b) under the Exchange Act. "Beneficial Owner"
shall have the meaning set forth in Rule 13d-3
under the Exchange Act.
Notwithstanding the foregoing, any event or transaction
which would otherwise constitute a Change in Control (a
"Transaction") shall not constitute a Change in Control for
purposes of this Agreement if, in connection with the
Transaction, the Executive participates as an equity
investor in the acquiring entity or any of its affiliates
(the "Acquiror"). For purposes of the preceding sentence,
the Executive shall not be deemed to have participated as an
equity investor in the Acquiror by virtue of (i) obtaining
beneficial ownership of any equity interest in the Acquiror
as a result of the grant to the Executive of an incentive
compensation award under one or more incentive plans of the
Acquiror (including, but not limited to, the conversion in
connection with the Transaction of incentive compensation
awards of the Company into incentive compensation awards of
the Acquiror), on terms and conditions substantially
equivalent to those applicable to other executives of the
Company immediately prior to the Transaction, after taking
into account normal differences attributable to job
responsibilities, title and the like, (ii) obtaining
beneficial ownership of any equity interest in the Acquiror
on terms and conditions substantially equivalent to those
obtained in the Transaction by all other shareholders of the
Company, or (iii) obtaining beneficial ownership of any
equity interest in the Acquiror in a manner unrelated to a
Transaction.
(f) Notice of Termination. During the Employment
Period, any purported termination of the Executive's
employment (other than by reason of death)shall be
communicated by written Notice of Termination from one party
hereto to the other party hereto in accordance with Section
12(b). For purposes of this Agreement, a "Notice of
Termination" shall mean a notice that shall indicate the
specific termination provision in this Agreement relied
upon, if any, and shall set forth in reasonable detail the
facts and circumstances claimed to provide a basis for
termination of the Executive's employment under the
provision so indicated. Further, a Notice of Termination
for Cause is required to include a copy of a resolution duly
adopted by the affirmative vote of not less than three-
fourths (3/4) of the entire membership of the Board at a
meeting of the Board that was called and held no more than
ninety (90)days after the date the Board had knowledge of
the most recent act or omission giving rise to such breach
for the purpose of considering such termination (after
reasonable notice to the Executive and an opportunity for
the Executive, together with the Executive's counsel, to be
heard before the Board and, if possible, to cure the breach
that was the basis for the Notice of Termination for Cause)
finding that, in the good faith opinion of the Board, the
Executive was guilty of conduct set forth in clause (i)or
(ii) of the definition of Cause herein, and specifying the
particulars thereof in detail. Unless the Board determines
otherwise, a Notice of Termination by the Executive alleging
a termination for Good Reason must be made within 180 days
of the act or failure to act that the Executive alleges to
constitute Good Reason.
(g) Date of Termination. "Date of Termination," with
respect to any purported termination of the Executive's
employment during the Employment Period, shall mean the date
specified in the Notice of Termination (which, in the case
of a termination by the Company, for reasons other than
Cause, shall not be less than thirty (30) days and, in the
case of a termination by the Executive, shall not be less
than fifteen (15) days nor more than sixty (60) days), from
the date such Notice of Termination is given).
5. Obligations of the Company Upon Termination.
(a) Termination Other Than for Cause, Death or
Disability. During the Employment Period, if the Company
shall terminate the Executive's employment(other than for
Cause, death or Disability) or the Executive shall terminate
his employment for Good Reason (termination in any such case
being referred to as "Termination") the Company shall pay to
the Executive the amounts, and provide the Executive with
the benefits, described in this Section 5 (hereinafter
referred to as the "Severance Payments"). Subject to
Section 5(g), the amounts specified in this Section 5(a)
shall be paid within thirty (30) days after the Date of
Termination.
(i) Lump Sum Payment. In lieu of any further payments
of Annual Base Salary or annual Incentive Compensation
Awards to the Executive for periods subsequent to the Date
of Termination, the Company shall pay to the Executive a
lump sum amount in cash equal to the product of (X) the sum
of (A) the Executive's Annual Base Salary and (B) the
greater of the Executive's target bonus for the year of
termination or the average of the three(3) years' highest
gross bonus awards, not necessarily consecutive, paid by the
Company (or its predecessor) to the Executive in the five
(5) years preceding the year of termination and (Y) the
number of years remaining in the Employment Period
(including fractional years), but in no event less than two
(2);provided, however, that in the event of a Termination
following a Change in Control such multiplier shall not be
less than three (3).
(ii) Accrued Obligations. The Company shall pay the
Executive a lump sum amount in cash equal to the sum of (A)
the Executive's Annual Base Salary through the Date of
Termination to the extent not thereto-fore paid, (B) an
amount equal to any annual Incentive Compensation Awards
earned with respect to fiscal years ended prior to the year
that includes the Date of Termination to the extent not
theretofore paid and (C) an amount equal to the target
amount payable under any annual Incentive Compensation
Awards for the fiscal year that includes the Date of
Termination or, if greater, the average of the three (3)
years' highest gross bonus awards, not necessarily
consecutive, paid by the Company (or its predecessor) to the
Executive in the five (5) years preceding the year of
Termination multiplied by a fraction the numerator of which
shall be the number of days from the beginning of such
fiscal year to and including the Date of Termination and the
denominator of which shall be 365, in each case to the
extent not theretofore paid. (The amounts specified in
clauses (A), (B) and (C) shall be hereinafter referred to as
the "Accrued Obligations.")
(iii) Deferred Compensation. In the event of a
Termination following a Change in Control, the Company shall
pay the Executive a lump sum payment in an amount equal to
any compensation previously deferred by the Executive
(together with any accrued interest or earnings thereon).
(iv) Pension Supplement. The Company shall provide the
Executive with such additional years of age and service
credit for purposes of the calculation of retirement
benefits under the Enova Supplemental Executive Retirement
Plan (the "Enova SERP") as if he had remained employed for
the remainder of the Employment Period, but in no event less
than two (2) years, provided, however, that there shall be
no reduction under the Enova SERP for early retirement as
set forth in paragraph 4.a.ii of the Enova SERP, except for
the early retirement reduction factor determined in
accordance with the table in Section 5.4 of the San Diego
Gas & Electric Company Pension Plan, as adopted by Enova
(the "Pension Plan"); and provided, further, however, that
in the event of a Termination following a Change in Control,
the Company shall pay the Executive a lump sum payment in an
amount equal to the benefits under the Enova SERP as
described in paragraph 2.c of the Enova SERP, less the value
calculated consistently with paragraph 4.b of the SERP of
the Executive's entitlement under the Pension Plan, such
payment to be calculated and paid without regard to the
limitation described in the Enova SERP relating to Section
280G of the Code and with such additional years of age and
service credit as if he had remained employed for the
remainder of the Employment Period, but in no event less
than two (2) years; and in either case The Executive's
termination shall be a "Qualifying Termination" as defined
in the Split Dollar Life Insurance Agreement entered into
between the Executive and Enova, and where necessary the
Company shall take such steps, including the payment of
additional premiums, as may be necessary so that the cash
value of the policy as of the Date of Termination shall
reflect the additional age and service credit.
(v) Accelerated Vesting and Payment of Long-Term
Incentive Awards. All equity-based long-term Incentive
Compensation Awards held by the Executive under any long-
term Incentive Compensation Plan maintained by the Company
or any affiliate shall immediately vest and become
exercisable as of the Date of Termination, to be exercised
in accordance with the terms of the applicable plan and
award agreement; provided, however, that any such awards
granted on or after the Effective Date shall remain
outstanding and exercisable until the earlier of (A)
eighteen (18) months following the Date of Termination or
(B) the expiration of the original term of such award (it
being understood that all awards granted prior to the
Effective Date shall remain outstanding and exercisable for
a period that is no less than that provided for in the
applicable agreement in effect as of the date of grant), and
the Company shall pay to the Executive, with respect to all
cash-based, long-term Incentive Compensation Awards made to
the Executive that are outstanding under any long-term
Incentive Compensation Plan maintained by the Company or any
affiliate an amount equal to the target amount payable under
such long-term Incentive Compensation Awards multiplied by a
fraction, the numerator of which shall be the number of days
from the beginning of the award cycle to and including the
Date of Termination, and the denominator of which shall be
the number of days in the cycle as originally granted.
(vi) Continuation of Welfare Benefits. For (A) the
remainder of the Employment Period, but in no event less
than a period of two (2) years or (B) until the Executive is
eligible for retiree medical benefits, whichever is longer,
immediately following the Date of Termination, the Company
shall arrange to provide the Executive and his dependents
with life, disability, accident and health insurance
benefits substantially similar to those provided to the
Executive and his dependents immediately prior to the Date
of Termination, provided, however, that if the Executive
becomes employed with another employer and is eligible to
receive life, disability, accident and health insurance
benefits under another employer-provided plan, the benefits
under the Company's plans shall be secondary to those
provided under such other plan during such applicable period
of eligibility, and further provided, however, that in the
event of a termination following a Change in Control such
period shall not be less than the number of years until the
Executive reaches normal retirement age as defined under the
Enova tax-qualified plans.
(b) Termination by the Company for Cause or by the
Executive Other than for Good Reason. Subject to the
provisions of Section 6 of this Agreement, if the
Executive's employment shall be terminated for Cause during
the Employment Period, or if the Executive terminates
employment during the Employment Period other than for Good
Reason, the Company shall have no further obligations to The
Executive under this Agreement other than the Accrued
Obligations.
(c) Termination due to Death or Disability. If the
Executive's employment shall terminate by reason of death or
Disability, the Company shall pay the Executive or his
estate, as the case may be, the Accrued Obligations and,
solely in the case of termination by reason of Disability,
the Pension Supplement. Such payments shall be in addition
to those rights and benefits to which the Executive or his
estate may be entitled under the relevant Company plans or
programs.
(d) Code Section 280G.
(i) Notwithstanding any other provisions of this
Agreement, in the event that any payment or benefit received
or to be received by the Executive (whether pursuant to the
terms of this Agreement or any other plan, arrangement or
agreement with (A) the Company, (B) any Person (as defined
in Section 4(e)) whose actions result in a Change in Control
or (C) any Person affiliated with the Company or such
Person) (all such payments and benefits, including the
Severance Payments, being hereinafter called "Total
Payments")would not be deductible (in whole or part) by the
Company, an affiliate or Person making such payment or
providing such benefit as a result of section 280G of the
Code, then, to the extent necessary to make such portion of
the Total Payments deductible (and after taking into account
any reduction in the Total Payments provided by reason of
section 280G of the Code in such other plan, arrangement or
agreement), the cash Severance Payments shall first be
reduced (if necessary, to zero), and all other Severance
Payments shall thereafter be reduced (if necessary, to
zero); provided, however, that the Executive may elect to
have the noncash Severance Payments reduced (or eliminated)
prior to any reduction of the cash Severance Payments.
(ii) For purposes of this limitation, (A) no portion of
the Total Payments the receipt or enjoyment of which the
Executive shall have waived at such time and in such manner
as not to constitute a "payment" within the meaning of
section 280G(b) of the Code shall be taken into account, (B)
no portion of the Total Payments shall be taken into account
which, in the opinion of tax counsel ("Tax Counsel")
reasonably acceptable to the Executive and selected by the
Company's accounting firm which (or, in the case of a
payment following a Change in Control the accounting firm
that was, immediately prior to the Change in Control, the
Company's independent auditor) (the "Auditor"),does not
constitute a "parachute payment" within the meaning of
section 280G(b)(2) of the Code, including by reason of
section 280G(b)(4)(A) of the Code, (C) the Severance
Payments shall be reduced only to the extent necessary so
that the Total Payments (other than those referred to in
clause (A) or(B)) in their entirety constitute reasonable
compensation for services actually rendered within the
meaning of section 280G(b)(4)(B) of the Code or are
otherwise not subject to disallowance as deductions by
reason of section 280G of the Code, in the opinion of Tax
Counsel, and (D) the value of any noncash benefit or any
deferred payment or benefit included in the Total Payments
shall be determined by the Auditor in accordance with the
principles of sections 280G(d)(3) and (4) of the Code.
(e) Consulting and Non-Competition. If the Total
Payments are subject to reduction in accordance with the
above provisions of Section 5(d), the Executive shall have
the option, to be exercised within ten (10) days after
receipt of notice of such reduction from the Company, to
enter into a consulting and non-competition agreement with
the Company (the "Consulting and Non-Competition
Agreement"), which shall (1) provide the Executive with
payments and benefits, payable over the term of the
agreement, the present value of which in the aggregate is
equal to or greater than the present value (determined by
applying a discount rate equal to the interest rate provided
in section 1274(b)(2)(B) of the Code) of the balance of the
payments and benefits otherwise payable to the Executive
without regard to the provisions of Section 5(d), (2)
require the Executive to make his services available to the
Company for no more than twenty (20) hours per month and (3)
last for a period of not more than two (2) years (unless the
Executive consents to a longer period).
(f) Gross-Up Payment. In the event that the Executive
receives a notice from the Internal Revenue Service to the
effect that the amounts payable under the Consulting and
Non-Competition Agreement would be subject (in whole or
part)to the tax (the "Excise Tax") imposed under section
4999 of the Code, within thirty(30) days after the date the
Chairman of the Board receives a copy of such notice the
Company shall pay to the Executive such additional amounts
(the "Gross-Up Payment") such that the net amount retained
by the Executive, after deduction of any Excise Tax on the
Total Payments and any federal, state and local income and
employment taxes and Excise Tax upon the Gross-Up Payment,
shall be equal to the Total Payments. For purposes of
determining the amount of the Gross-Up Payment, the
Executive shall be deemed to pay federal income tax at the
highest marginal rate of federal income taxation in the
calendar year in which the Gross-Up Payment is to be made
and state and local income taxes at the highest marginal
rate of taxation in the state and locality of the
Executive's residence on the date on which the Gross-Up
Payment is calculated for purposes of this section, net of
the maximum reduction in federal income taxes which could be
obtained from deduction of such state and local taxes. In
the event that the Excise Tax is subsequently determined to
be less than the amount taken into account hereunder, the
Executive shall repay to the Company, at the time that the
amount of such reduction in Excise Tax is finally
determined, the portion of the Gross-Up Payment attributable
to such reduction (plus that portion of the Gross-Up Payment
attributable to the Excise Tax and federal, state and local
income tax imposed on the Gross-Up Payment being repaid by
the Executive to the extent that such repayment results in a
reduction in Excise Tax and/or a federal, state or local
income tax deduction) plus interest on the amount of such
repayment at the rate provided in section 1274(b)(2)(B) of
the Code. In the event that the Excise Taxis determined to
exceed the amount taken into account hereunder (including by
reason of any payment the existence or amount of which
cannot be determined at the time of the Gross-Up Payment),
the Company shall make an additional Gross-Up Payment in
respect of such excess (plus any interest, penalties or
additions payable by the Executive with respect to such
excess) at the time that the amount of such excess is
finally determined. The Executive and the Company shall
each reasonably cooperate with the other in connection with
any administrative or judicial proceedings concerning the
existence or amount of liability for Excise Tax with respect
to the Total Payments.
(g) Release. Notwithstanding anything herein to the
contrary, the Company's obligation to make the payments
provided for in this Section 5 is expressly made subject to
and conditioned upon (i) the Executive's prior execution of
a release substantially in the form attached hereto as
Exhibit A within forty-five (45)days after the applicable
Date of Termination and (ii) the Executive's non-revocation
of such release in accordance with the terms thereof.
6. Nonexclusivity of Rights.
Nothing in this Agreement shall prevent or limit the
Executive's continuing or future participation in any
benefit, plan, program, policy or practice provided by the
Company and for which the Executive may qualify (except with
respect to any benefit to which the Executive has waived his
rights in writing), nor shall anything herein limit or
otherwise affect such rights as the Executive may have under
any other contract or agreement entered into after the
Effective Date with the Company. Amounts which are vested
benefits or which the Executive is otherwise entitled to
receive under any benefit, plan, policy, practice or program
of, or any contract or agreement entered into with, the
Company shall be payable in accordance with such benefit,
plan, policy, practice or program or contract or agreement
except as explicitly modified by this Agreement.
7. Full Settlement; Mitigation.
The Company's obligation to make the payments provided
for in this Agreement and otherwise to perform its
obligations hereunder shall not be affected by any set-off,
counterclaim, recoupment, defense or other claim, right or
action which the Company may have against the Executive or
others, provided that nothing herein shall preclude the
Company from separately pursuing recovery from the Executive
based on any such claim. In no event shall the Executive be
obligated to seek other employment or take any other action
by way of mitigation of the amounts (including amounts for
damages for breach) payable to the Executive under any of
the provisions of this Agreement and such amounts shall not
be reduced whether or not the Executive obtains other
employment.
8. Arbitration.
Any dispute about the validity, interpretation, effect or
alleged violation of this Agreement (an "arbitrable
dispute") must be submitted to confidential arbitration in
San Diego, California. Arbitration shall take place before
an experienced employment arbitrator licensed to practice
law in such state and selected in accordance with the Model
Employment Arbitration Procedures of the American
Arbitration Association. Arbitration shall be the exclusive
remedy of any arbitrable dispute. Should any party to this
Agreement pursue any arbitrable dispute by any method other
than arbitration, the other party shall be entitled to
recover from the party initiating the use of such method all
damages, costs, expenses and attorneys' fees incurred as a
result of the use of such method. Notwithstanding anything
herein to the contrary, nothing in this Agreement shall
purport to waive or in any way limit the right of any party
to seek to enforce any judgment or decision on an arbitrable
dispute in a court of competent jurisdiction.
9. Confidentiality.
The Executive acknowledges that in the course of his
employment with the Company, he has acquired non-public
privileged or confidential information and trade secrets
concerning the operations, future plans and methods of doing
business("Proprietary Information") of the Company, its
subsidiaries and affiliates; and the Executive agrees that
it would be extremely damaging to the Company, its
subsidiaries and affiliates if such Proprietary Information
were disclosed to a competitor of the Company, its
subsidiaries and affiliates or to any other person or
corporation. The Executive understands and agrees that all
Proprietary Information has been divulged to the Executive
in confidence and further understands and agrees to keep all
Proprietary Information secret and confidential (except for
such information which is or becomes publicly available
other than as a result of a breach by the Executive of this
provision) without limitation in time. In view of the
nature of the Executive's employment and the Proprietary
Information the Executive has acquired during the course of
such employment, the Executive likewise agrees that the
Company, its subsidiaries and affiliates would be
irreparably harmed by any disclosure of Proprietary
Information in violation of the terms of this paragraph and
that the Company, its subsidiaries and affiliates shall
therefore be entitled to preliminary and/or permanent
injunctive relief prohibiting the Executive from engaging in
any activity or threatened activity in violation of the
terms of this paragraph and to any other relief available to
them. Inquiries regarding whether specific information
constitutes Proprietary Information shall be directed to the
Board provided, that the Company shall not unreasonably
classify information as Proprietary Information.
10. Non-Solicitation of Employees.
The Executive recognizes that he possesses and will
possess confidential information about other employees of
the Company, its subsidiaries and affiliates relating to
their education, experience, skills, abilities, compensation
and benefits, and inter-personal relationships with
customers of the Company, its subsidiaries and affiliates.
The Executive recognizes that the information he possesses
and will possess about these other employees is not
generally known, is of substantial value tothe Company, its
subsidiaries and affiliates in developing their business and
in securing and retaining customers, and has been and will
be acquired by him because of his business position with the
Company, its subsidiaries and affiliates. The Executive
agrees that, during the Employment Period and for a period
of one (1) year thereafter, he will not, directly or
indirectly, solicit or recruit any employee of the Company,
its subsidiaries or affiliates for the purpose of being
employed by him or by any competitor of the Company, its
subsidiaries or affiliates on whose behalf he is acting as
an agent, representative or employee and that he will not
convey any such confidential information or trade secrets
about other employees of the Company, its subsidiaries and
affiliates to any other person; provided, however, that it
shall not constitute a solicitation or recruitment of
employment in violation of this paragraph to discuss
employment opportunities with any employee of the Company,
its subsidiaries or affiliates who has either first
contacted the Executive or regarding whose employment the
Executive has discussed with and received the written
approval of the Chairman of the Board prior to making such
solicitation or recruitment. In view of the nature of the
Executive's employment with the Company, the Executive
likewise agrees that the Company, its subsidiaries and
affiliates would be irreparably harmed by any solicitation
or recruitment in violation of the terms of this paragraph
and that the Company, its subsidiaries and affiliates shall
therefore be entitled to preliminary and/or permanent
injunctive relief prohibiting the Executive from engaging in
any activity or threatened activity in violation of the
terms of this paragraph and to any other relief available to
them.
11. Legal Fees.
The Company shall pay to the Executive all legal fees and
expenses(including but not limited to fees and expenses in
connection with any arbitration)incurred by the Executive in
disputing in good faith any issue arising under this
Agreement relating to the termination of the Executive's
employment or in seeking in good faith to obtain or enforce
any benefit or right provided by this Agreement, but in each
case only to the extent the arbitrator or court determines
that the Executive had a reasonable basis for such claim.
12. Successors.
(a) Assignment by Executive. This Agreement is personal
to the Executive and without the prior written consent of
the Company shall not be assign-able by the Executive
otherwise than by will or the laws of descent and
distribution. This Agreement shall inure to the benefit of
and be enforceable by the Executive's legal representatives.
(b) Successors and Assigns of Company. This Agreement
shall inure to the benefit of and be binding upon the
Company, its successors and assigns.
(c) Assumption. The Company shall require any successor
(whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of
the business and/or assets of the Company to assume
expressly and agree to perform this Agreement in the same
manner and to the same extent that the Company would be
required to perform it if no such succession had taken
place. As used in this Agreement, "Company" shall mean the
Company as hereinbefore defined and any successor to its
businesses and/or assets as aforesaid that assumes and
agrees to perform this Agreement by operation of law or
otherwise.
13. Miscellaneous.
(a) Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of
California, without reference to its principles of conflict
of laws. The captions of this Agreement are not part of the
provisions hereof and shall have no force or effect. This
Agreement may not be amended, modified, repealed, waived,
extended or discharged except by an agreement in writing
signed by the party against whom enforcement of such
amendment, modification, repeal, waiver, extension or
discharge is sought. No person, other than pursuant to a
resolution of the Board or a committee thereof, shall have
authority on behalf of the Company to agree to amend,
modify, repeal, waive, extend or discharge any provision of
this Agreement or anything in reference thereto.
(b) Notices. All notices and other communications
hereunder shall be in writing and shall be given by hand
delivery to the other party or by registered or certified
mail, return receipt requested, postage prepaid, addressed,
in either case, tothe Company's headquarters or to such
other address as either party shall have furnished to the
other in writing in accordance herewith. Notices and
communications shall be effective when actually received by
the addressee. (c) Severability. The invalidity or
unenforceability of any provision of this Agreement shall
not affect the validity or enforceability of any other
provision of this Agreement.
(d) Taxes. The Company may withhold from any amounts
payable under this Agreement such federal, state or local
taxes as shall be required to be withheld pursuant to any
applicable law or regulation.
(e) No Waiver. The Executive's or the Company's failure
to insist upon strict compliance with any provision hereof
or any other provision of this Agreement or the failure to
assert any right the Executive or the Company may have
hereunder, including, without limitation, the right of the
Executive to terminate employment for Good Reason pursuant
to Section 4 of this Agreement, or the right of the Company
to terminate the Executive's employment for Cause pursuant
to Section 4 of this Agreement, shall not be deemed to be a
waiver of such provision or right or any other provision or
right of this Agreement.
(f) Entire Agreement. This instrument contains the
entire agreement of the Executive, the Company or any
predecessor or subsidiary thereof with respect to the
subject matter hereof, and all promises, representations,
understandings, arrangements and prior agreements are merged
herein and superseded hereby including, but not limited to,
that certain employment agreement dated September 18, 1996
between the Executive and Enova. Notwithstanding the
foregoing, the provisions of any employee benefit or
compensation plan, program or arrangement applicable to the
Executive, including that certain Incentive Bonus Agreement,
entered into between the Executive and Enova, shall remain
in effect, except as expressly otherwise provided herein.
IN WITNESS WHEREOF, the Executive and, pursuant to due
authorization from its Board of Directors, the Company have
caused this Agreement to be executed as of the day and year
first above written.
MINERAL ENERGY COMPANY
__________________________
Xxxxx X. Xxxxxx
President
__________________________
Xxxxxxx X. Xxxx
EXHIBIT A
GENERAL RELEASE
This GENERAL RELEASE (the "Agreement"), dated _______, is
made by and between ___________________, a California
corporation (the "Company") and _____________ ("you" or
"your").
WHEREAS, you and the Company have previously entered into
that certain Employment Agreement dated _____________, 1996
(the "Employment Agreement"); and
WHEREAS, Section 5 of the Employment Agreement provides
for the payment of severance benefits in the event of the
termination of your employment under certain circumstances,
subject to and conditioned upon your execution and non-
revocation of a general release of claims by you against the
Company and its subsidiaries and affiliates.
NOW, THEREFORE, in consideration of the premises and the
mutual covenants herein contained, you and the Company
hereby agree as follows:
ONE: Your signing of this Agreement confirms that your
employment with the Company shall terminate at the close of
business on ___________,or earlier upon our mutual
agreement.
TWO: As a material inducement for the payment of
benefits under Section 5 of that certain Employment
Agreement between you and the Company, and except as
otherwise provided in this Agreement, you and the Company
hereby irrevocably and unconditionally release, acquit and
forever discharge the other from any and all Claims either
may have against the other. For purposes of his Agreement
and the preceding sentence, the words "Releasee" or
"Releasees"
and "Claim" or "Claims," shall have the meanings set forth
below:
(a)The words "Releasee" or "Releasees" shall refer to the
you and to the Company and each of the Company's owners,
stockholders, predecessors, successors, assigns, agents,
directors, officers, employees, representatives, attorneys,
advisors, parent companies, divisions, subsidiaries,
affiliates(and agents, directors, officers, employees,
representatives, attorneys and advisors of such parent
companies, divisions, subsidiaries and affiliates), and all
persons acting by, through, under or in concert with any of
them.
(b)The words "Claim" or "Claims" shall refer to any
charges, complaints, claims, liabilities, obligations,
promises, agreements, controversies, damages, actions,
causes of action, suits, rights, demands, costs, losses,
debts and expenses (including attorneys' fees and costs
actually incurred)of any nature whatsoever, known or
unknown, suspected or unsuspected, which you or the Company
now, in the past or, except as limited by law or regulation
such as the Age Discrimination in Employment Act (ADEA), in
the future may have, own or hold against any of the
Releasees; provided, however, that the word "Claim" or
"Claims" shall not refer to any charges, complaints, claims,
liabilities, obligations, promises, agreements,
controversies, damages, actions, causes of action, suits,
rights, demands, costs, losses, debts and expenses
(including attorneys' fees and costs actually incurred)
arising under [identify severance, employee benefits, stock
option and other agreements containing duties, rights
obligations etc. of either party that are to remain
operative]. Claims released pursuant to this Agreement by
you and the Company include, but are not limited to, rights
arising out of alleged violations of any contracts, express
or implied, any tort, any claim that you failed to perform
or negligently performed or breached your duties during
employment at the Company, any legal restrictions on the
Company's right to terminate employees or any federal, state
or other governmental statute, regulation, or ordinance,
including, without limitation: (1) Title VII of the Civil
Rights Act of l964 (race, color, religion, sex and national
origin discrimination); (2) 42 U.S.C Sec 1981
(discrimination); (3) 29 U.S.C. Sec 621-634(age
discrimination); (4) 29 U.S.C. Sec 206(d)(l) (equal pay);
(5) 42 U.S.C. Sec 12101, et seq. (disability); (6) the
California Constitution, Article I, Section
8(discrimination); (7) the California Fair Employment and
Housing Act (discrimination, including race, color, national
origin, ancestry, physical handicap, medical condition,
marital status, religion, sex or age); (8) California Labor
Code Section 1102.1 (sexual orientation discrimination); (9)
Executive Order 11246(race, color, religion, sex and
national origin discrimination); (10) Executive Order 11141
(age discrimination); (11) Sec 503 and 504 of the
Rehabilitation Act of 1973 (handicap discrimination); (12)
The Worker Adjustment and Retraining Act (WARN Act); (13)
the California Labor Code (wages, hours, working conditions,
benefits and other matters); (14) the Fair Labor Standards
Act (wages, hours, working conditions and other matters);
the Federal Employee Polygraph Protection Act (prohibits
employer from requiring employee to take polygraph test as
condition of employment); and (15) any federal, state or
other governmental statute, regulation or ordinance which is
similar to any of the statutes de-scribed in clauses (1)
through (14).
THREE: You and the Company expressly waive and
relinquish all rights and benefits afforded by any statute
(including but not limited to Section 1542 of the Civil Code
of the State of California) which limits the effect of are
lease with respect to unknown claims. You and the Company
do so under-standing and acknowledging the significance of
the release of unknown claims and the waiver of statutory
protection against a release of unknown claims(including but
not limited to Section 1542). Section 1542 of the Civil
Code of the State of California states as follows:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE
CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT
THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM
MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE
DEBTOR."
Thus, notwithstanding the provisions of Section 1542 or of
any similar statute, and for the purpose of implementing a
full and complete release and discharge of the Releasees,
you and the Company expressly acknowledge that this
Agreement is intended to include in its effect, without
limitation, all Claims which are known and all Claims which
you or the Company do not know or suspect to exist in your
or the Company's favor at the time of execution of this
Agreement and that this Agreement contemplates the
extinguishment of all such Claims.
FOUR: The parties acknowledge that they might hereafter
discover facts different from, or in addition to, those they
now know or believe to be rue with respect to a Claim or
Claims released herein, and they expressly agree to assume
the risk of possible discovery of additional or different
facts, and agree that this Agreement shall be and remain
effective, in all respects, regardless of such additional or
different discovered facts.
FIVE: You hereby represent and acknowledge that you have
not filed any Claim of any kind against the Company or
others released in this Agreement. You further hereby
expressly agree never to initiate against the Company or
others released in this Agreement any administrative
proceeding, lawsuit or any other legal or equitable
proceeding of any kind asserting any Claims that are
released in this Agreement.
The Company hereby represents and acknowledges that it
has not filed any Claim of any kind against you or others
released in this Agreement. The Company further hereby
expressly agrees never to initiate against you or others
released in this Agreement any administrative proceeding,
lawsuit or any other legal or equitable proceeding of any
kind asserting any Claims that are released in this
Agreement.
SIX: You hereby represent and agree that you have not
assigned or transferred, or attempted to have assigned or
transfer, to any person or entity, any of the Claims that
you are releasing in this Agreement.
The Company hereby represents and agrees that it has not
assigned or transferred, or attempted to have assigned or
transfer, to any person or entity, any of the Claims that it
is releasing in this Agreement.
SEVEN: As a further material inducement to the Company
to enter into this Agreement, you hereby agree to indemnify
and hold each of the Releasees harmless from all loss,
costs, damages, or expenses, including without limitation,
attorneys' fees incurred by Releasees, arising out of any
breach of this Agreement by you or the fact that any
representation made in this Agreement by you was false when
made.
EIGHT: You and the Company represent and acknowledge
that, in executing this Agreement, neither is relying upon
any representation or statement not set forth in this
Agreement or the Severance Agreement.
NINE: (a)This Agreement shall not in any way be
construed as an admission by the Company that it has acted
wrongfully with respect to you or any other person, or that
you have any rights whatsoever against the Company, and the
Company specifically disclaims any liability to or wrongful
acts against you or any other person, on the part of itself,
its employees or its agents. This Agreement shall not in
any way be construed as an admission by you that you have
acted wrongfully with respect to the Company, or that you
failed to perform your duties or negligently performed or
breached your duties, or that the Company had good cause to
terminate your employment. (b)If you are a party or are
threatened to be made a party to any proceeding by reason of
the fact that you were an officer [or director] of the
Company, the Company shall indemnify you against any
expenses(including reasonable attorney fees provided that
counsel has been approved by the Company prior to
retention), judgments, fines, settlements, and other amounts
actually or reasonably incurred by you in connection with
that proceeding, provided that you acted in good faith and
in a manner you reasonably believed to be in the best
interest of the Company. The limitations of California
Corporations Code Section 317 shall apply to this assurance
of indemnification. (c) You agree to cooperate with the
Company and its designated attorneys, representatives and
agents in connection with any actual or threatened judicial,
administrative or other legal or equitable proceeding in
which the Company is or may be become involved. Upon
reasonable notice, you agree to meet with and provide to the
Company or its designated attorneys, representatives or
agents all information and knowledge you have relating to
the subject matter of any such proceeding.
TEN: This Agreement is made and entered into in
California. This Agreement shall in all respects be
interpreted, enforced and governed by and under the laws of
the State of California. Any dispute about the validity,
interpretation, effect or alleged violation of this
Agreement (an "arbitrable dispute") must be submitted to
arbitration in [Los Angeles][San Diego], California.
Arbitration shall take place before an experienced
employment arbitrator licensed to practice law in such state
and selected in accordance with the Model Employment
Arbitration Procedures of the American Arbitration
Association. Arbitration shall be the exclusive remedy for
any arbitrable dispute. The arbitrator in any arbitrable
dispute shall not have authority to modify or change the
Agreement in any respect. You and the Company shall each be
responsible for payment of one-half the amount of the
arbitrator's fee(s). Should any party to this Agreement
institute any legal action or administrative proceeding
against the other with respect to any Claim waived by this
Agreement or pursue any arbitrable dispute by any method
other than arbitration, the prevailing party shall be
entitled to recover from the initiating party all damages,
costs, expenses and attorneys' fees incurred as a result of
that action. The arbitrator's decision and/or award will be
fully enforceable and subject to an entry of judgment by the
Superior Court of the State of California for the County of
[Los Angeles][San Diego].
ELEVEN: Both you and the Company understand that this
Agreement is final and binding eight days after its
execution and return. Should you nevertheless attempt to
challenge the enforceability of this Agreement as provided
in Paragraph TEN or, in violation of that Paragraph, through
litigation, as a further limitation on any right to make
such a challenge, you shall initially tender to the Company,
by certified check delivered to the Company, all monies
received pursuant to Section 5 of the Employment Agreement,
plus interest, and invite the Company to retain such monies
and agree with you to cancel this Agreement and void the
Company's obligations under Section 5 of the Employment
Agreement. In the event the Company accepts this offer, the
Company shall retain such monies and this Agreement shall be
canceled and the Company shall have no obligation under
Section 5 of the Employment Agreement. In the event the
Company does not accept such offer, the Company shall so
notify you, and shall place such monies in an interest-
bearing escrow account pending resolution of the dispute
between you and the Company as to whether or not this
Agreement and the Company's obligations under Section 5 of
the Employment Agreement shall be set aside and/or otherwise
rendered voidable or unenforceable. Additionally, any
consulting agreement then in effect between you and The
Company shall be immediately rescinded with no requirement
of notice.
TWELVE: Any notices required to be given under this
Agreement shall be delivered either personally or by first
class United States mail, postage prepaid, addressed to the
respective parties as follows:
To Company: [TO COME]
Attn: [TO COME]
To You:
___________________
___________________
___________________
THIRTEEN: You understand and acknowledge that you have
been given a period of 45 days to review and consider this
Agreement (as well as statistical data on the persons
eligible for similar benefits) before signing it and may use
as much of this 45-day period as you wish prior to signing.
You are encouraged, at your personal expense, to consult
with an attorney before signing this Agreement. You
understand and acknowledge that whether or not you do so is
your decision. You may revoke this Agreement within seven
days of signing it. If you wish to revoke, the Company's
Vice President, Human Resources must receive written notice
from you no later than the close of business on the seventh
day after you have signed the Agreement. If revoked, this
Agreement shall not be effective and enforceable and you
will not receive payments or benefits under Section 5 of the
Employment Agreement.
FOURTEEN: This Agreement constitutes the entire
Agreement of the parties hereto and supersedes any and all
other Agreements (except the Employment Agreement) with
respect to the subject matter of this Agreement, whether
written or oral, between you and the Company. All
modifications and amendments to this Agreement must be in
writing and signed by the parties.
FIFTEEN: Each party agrees, without further
consideration, to sign or cause to be signed, and to deliver
to the other party, any other documents and to take any
other action as may be necessary to fulfill the obligations
under this Agreement.
SIXTEEN: If any provision of this Agreement or the
application thereof is held invalid, the invalidity shall
not affect other provisions or applications of the Agreement
which can be given effect without the invalid provisions or
application; and to this end the provisions of this
Agreement are declared to be severable.
SEVENTEEN: This Agreement may be executed in
counterparts.
I have read the foregoing General Release and I accept and
agree to the provisions it contains and hereby execute it
voluntarily and with full under-standing of its
consequences. I am aware it includes a release of all known
or unknown claims.
DATED:____________________
_____________________________
DATED:____________________
_____________________________
You acknowledge that you first received this Agreement on
[date].
___________________________
