Exhibit 10.3
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. Xxxxxx (the "Executive");
WHEREAS, the Executive is currently serving as President
and Chief Operating Officer of Pacific Enterprises, a
California corporation ("Pacific Enterprises"), 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, Pacific Enterprises, Enova, Inc., a
California corporation ("Enova"), 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 Chairman of
the Board of Directors of the Company (the "Board") and
Chief Executive 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 President, Chief Operating Officer and
Vice Chairman of the Board) ("Office of the Chair-man") and
shall report only to 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
Chairman of the Board with such authority, duties and
responsibilities with respect to such position as set forth
below.
(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. (ii) 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
share-holders. The Chairman shall be responsible for Board
and shareholder governance and shall have such duties and
responsibilities as are customarily assigned to such
positions.
(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 no less than $760,000 and shall be payable in accordance
with the Company's general payroll practices. Subject to
Section 4(e)(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(e)(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 (i) on
a year-by-year basis, annual compensation providing the
Executive with an annual bonus opportunity of not less than
60% of his Annual Base Salary at target and 120% of his
Annual Base Salary at maximum, and (ii) long-term incentive
compensation (collectively referred to as "Incentive
Compensation Awards"). Any equity awards granted to the
Executive may be granted, at the Executive's election, to
trusts established for the benefit of members of the
Executive's family. With respect to incentive compensation
awards granted prior to the Effective Date, the Executive
shall be entitled to retain such awards in accordance with
their terms, which shall be appropriately adjusted as a
result of the Merger.
(c) Retirement and Welfare Benefit Plans. In addition
to the benefits provided under Section 3(b), during the
Employment Period and so long as the Executive is employed
by the Company, he shall be eligible to participate in all
other savings, retirement and welfare plans, practices,
policies and programs applicable generally to employees
and/or senior executive officers of the Company and its
domestic subsidiaries, except with respect to any benefits
under any plan, practice, policy or program to which the
Executive has waived his rights in writing. To the extent
that benefits payable or provided to the Executive under
such plans are materially less favorable on a benefit by
benefit basis than the benefits that would have been
payable or provided to the Executive under comparable
Pacific Enterprises tax-qualified retirement plans,
executive retirement plans, executive medical plans and
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
Pacific Enterprises 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. The Executive's employment shall terminate
upon the Executive's death.
(b) Disability. The Executive's active employment
shall terminate 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 active employment
hereunder by reason of Disability unless at the time of
such termination there is no reasonable expectation that
the Executive will return to full time responsibilities
hereunder within the next ninety (90) day period. For
purposes of the Agreement, disability ("Disability") shall
have the same meaning as set forth in the Pacific
Enterprises long-term disability plan or its successor.
Upon such termination Executive shall continue as a
participant under the Pacific Enterprises long-term
disability plan or its successor and under the disability
provisions of Pacific Enterprises' supplemental executive
retirement plan or its successor until Executive reaches
mandatory retirement age, elects to commence retirement
benefits, becomes employed or ceases to have a Disability.
(c) 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.
(d) 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.
(e) By the Executive for Good Reason. The Executive may
terminate his employment during the Employment Period for
Good Reason (as herein defined). For purposes of this
Agreement, "Good Reason" shall mean the occurrence without
the written consent of the Executive of any one of the
following acts by the Company, or failures by the Company
to act, unless such act or failure to act is corrected
prior to the Date of Termination (as hereinafter defined)
specified in the Notice of Termination (as hereinafter
defined) given in respect thereof: (i) an adverse change
in the Executive's title, authority, duties,
responsibilities or reporting lines as specified in Section
2(a) and 2(b)of this Agreement; (ii) a reduction by the
Company in (A) the Executive's Annual Base Salary as in
effect on the date hereof or as the same may be increased
from time to time or (B) the Executive's aggregate
annualized compensation and benefits opportunities, except,
in the case of both (A) and (B), for across-the-board
reductions similarly affecting all executives (both of the
Company and of any Person (as hereinafter defined) then in
control of the Company) whose compensation is directly
determined by the compensation committee of the Board(and
the compensation committee of the board of directors of any
Person then in control of the Company); provided that, the
exception for across-the-board reductions shall not apply
following a Change in Control (as hereinafter defined);
(iii) the relocation of the Executive's principal place of
employment to a location away from his principal place of
employment as of the Effective Date, 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 position of Chairman of the Board during
Period B; (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.
(f) 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.
(g) 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.
(h) 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) two (2); provided, however, that in the
event of a Termination following a Change in Control, such
multiplier shall be 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 equivalent 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 pay the Executive a
lump sum payment (the "Pension Supplement") in an amount
equal to the present value (as determined in accordance
with the terms of Pacific Enterprises' supplemental
executive retirement plan) of the benefits to which the
Executive would be entitled under the Company's defined
benefit pension and retirement plans (the "Pension and
Retirement Plans") if he had continued working for the
Company for an additional two (2) years, and had increased
his age by two (2) years as of the Date of Termination but
not beyond the Mandatory Retirement Age; provided, however,
that in the event of a Termination following a Change in
Control, such number of years shall be three (3)but not
beyond the Mandatory Retirement Age. (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; and
(vi) Continuation of Welfare Benefits. For a period of
two (2)years or 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 in no event shall the
Executive be entitled to receive disability benefits under
the Pacific Enterprises long-term disability plan or
Pacific Enterprises' supplemental executive retirement plan
after the Executive has become eligible to commence receipt
of retirement benefits under Pacific Enterprises
supplemental executive retirement plan, and provided,
further, 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 three (3) years.
(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
Los Angeles, 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 interpersonal relationships
with customers of the Company, its subsidiaries and
affiliates. The Executive recognizes that the information
he possesses and will possess about these other employees
is not generally known, is of substantial value to the
Company, its subsidiaries and affiliates in developing
their business and in securing and retaining customers, and
has been and will be acquired by him because of his
business position with the Company, its subsidiaries and
affiliates. The Executive agrees that, during the
Employment Period and for a period of one (1) year
thereafter, he will not, directly or indirectly, solicit or
recruit any employee of the Company, its subsidiaries or
affiliates for the purpose of being employed by him or by
any competitor of the Company, its subsidiaries or
affiliates on whose behalf he is acting as an agent,
representative or employee and that he will not convey any
such confidential information or trade secrets about other
employees of the Company, its subsidiaries and affiliates
to any other person; provided, however, that it shall not
constitute a solicitation or recruitment of employment in
violation of this paragraph to discuss employment
opportunities with any employee of the Company, its
subsidiaries or affiliates who has either first contacted
the Executive or regarding whose employment the Executive
has discussed with and received the written approval of the
Chairman of the Board prior to making such solicitation or
recruitment. In view of the nature of the Executive's
employment with the Company, the Executive likewise agrees
that the Company, its subsidiaries and affiliates would be
irreparably harmed by any solicitation or recruitment in
violation of the terms of this paragraph and that the
Company, its subsidiaries and affiliates shall therefore be
entitled to preliminary and/or permanent injunctive relief
prohibiting the Executive from engaging in any activity or
threatened activity in violation of the terms of this
paragraph and to any other relief available to them.
11. Legal Fees.
The Company shall pay to the Executive all legal fees and
expenses (including but not limited to fees and expenses in
connection with any arbitration) incurred by the Executive
in disputing in good faith any issue arising under this
Agreement relating to the termination of the Executive's
employment or in seeking in good faith to obtain or enforce
any benefit or right provided by this Agreement, but in
each case only to the extent the arbitrator or court
determines that the Executive had a reasonable basis for
such claim.
12. Successors.
(a) Assignment by Executive. This Agreement is
personal to the Executive and without the prior written
consent of the Company shall not be 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, to the principal corporate offices of
Pacific Enterprises 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(d) of this Agreement, or the right of the
Company to terminate the Executive's employment for Cause
pursuant to Section 4(b) 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 Severance Agreement, dated October
11, 1996, between the Executive and Pacific Enterprises.
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 Pacific Enterprises, 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. Xxxxxx
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].
___________________________
