SUPPLEMENTAL PENSION AND DISABILITY AGREEMENT
SOUTHERN INDIANA GAS AND ELECTRIC COMPANY
AND
XXXXXX X. XXXXXXXX
THIS AGREEMENT, made and entered into this 4th day of April,
by and between SOUTHERN INDIANA GAS AND ELECTRIC COMPANY, a
corporation, of Evansville, Indiana, hereinafter referred to
as "COMPANY" and XXXXXX X. XXXXXXXX, of Evansville, Indiana,
hereinafter referred to as "XXXXXXXX",
WITNESSETH, THAT:
WHEREAS, the said XXXXXXXX is the Chief Executive Officer of
the COMPANY and it is the mutual desire of the parties that
the said XXXXXXXX continue to serve the COMPANY in an
official capacity as its Chief Executive Officer, or (if the
parties agree) as its Chairman and/or President but not its
Chief Executive Officer, until his retirement pursuant to
the terms of the COMPANY's Salaried Employees Pension Plan
("retirement") or earlier disability (as hereinafter
determined) or death and, as an inducement to the said
XXXXXXXX to continue in the employment of the COMPANY as
such officer until his retirement or earlier disability or
death;
WHEREAS, the said XXXXXXXX and the COMPANY are parties to a
certain Supplemental Pension and Disability Agreement dated
February 1, 1995 (the "1995 Agreement");
WHEREAS, said XXXXXXXX and the COMPANY wish that the 1995
Agreement be terminated and superseded by this Agreement and
the parties agree that XXXXXXXX XXXXXXXX is a third party
beneficiary to this agreement.
NOW, THEREFORE, KNOW ALL MEN BY THESE PRESENTS: That for
valuable and sufficient consideration the parties hereby
mutually stipulate, covenant and agree as follows:
1. Upon voluntary retirement as an active employee of the
COMPANY and continuing until his death, the COMPANY will pay
unto XXXXXXXX, as a supplemental retirement income, an
annual sum of 70% of his highest authorized level of annual
compensation, attained at any time while serving as an
employee of the COMPANY, reduced by the annual pension
earned by said XXXXXXXX under the COMPANY's Salaried
Employees Pension Plan. If as of the date of a Change in
Control (as defined in the Appendix hereto) said XXXXXXXX is
actively serving as Chief Executive Officer or a member or
advisory member of the Board of Directors of the COMPANY,
then from and after the date of such Change in Control, the
amount of the supplemental retirement income payable to said
XXXXXXXX under this Paragraph 1 shall be increased by an
amount equal to the annual maximum stipend portion of the
fee payable to a serving non-employee director of the
COMPANY from time to time (but in no event less than the
annual stipend that was payable to such a director
immediately prior to the Change in Control), minus the
amount, if any, actually received by said XXXXXXXX in
respect of his continuing service as a member or advisory
member of the Board of Directors of the COMPANY. The
supplemental retirement income payable to said XXXXXXXX
shall be payable in equal monthly installments and be
separate and distinct from income from any other source
including any pension, retirement or other plan. The
payment unto the said XXXXXXXX of the annual sum shall be in
recognition of past services as an employee of the COMPANY
and, except as required by law, said XXXXXXXX shall be
solely responsible for the payment of any and all taxes
accruing or payable on account of the remuneration herein
provided for. XXXXXXXX agrees that he will not voluntarily
retire prior to attaining the age of 62 years, and that he
will not remain an active employee of the COMPANY beyond
attainment of the age of 65 years.
2. If before the retirement of said XXXXXXXX as an active
employee of the COMPANY, the Board of Directors of the
COMPANY shall at any time determine on the basis of
sufficient and competent medical advice, that because of
mental or physical disability the said XXXXXXXX has become
permanently and totally incapacitated to perform the duties
of Chief Executive Officer of the COMPANY (or if he has
previously relinquished the duties of Chief Executive
Officer, the duties of the office that he is then filling),
commencing with the occurrence thereof and continuing
thereafter during the remainder of his life, the said
XXXXXXXX shall be relieved from performing any duties, and
placed on a retired status, but shall nevertheless be
entitled to receive, and the COMPANY shall pay to him, as
supplemental disability income, in recognition of his past
services, an annual sum, which when combined with other
periodic income received under the COMPANY's Salaried
Employees Pension Plan or representing Long-Term Disability
benefits, will equal, but not be greater than, 70% of his
highest authorized level of annual compensation, attained at
any time while serving as an employee of COMPANY. This
annual sum shall be payable in monthly installments and be
separate and distinct from income paid from any other
source, including any pension, retirement or insurance plan.
Except as required by law, XXXXXXXX shall be solely
responsible for the payment of any and all taxes accruing or
payable on account of the remuneration herein provided for.
3. In the event that said XXXXXXXX should die before the
commencement of retirement referred to in Paragraph 1, or
while on disability as provided for in Paragraph 2, hereof,
the COMPANY, in recognition of the services rendered by the
said XXXXXXXX, shall pay unto XXXXXXXX XXXXXXXX, his wife, a
monthly payment equal to (i) during the period commencing
with (and including) the calendar month of said XXXXXXXX'X
death until (and including) the calendar month in which
XXXXXXXX XXXXXXXX attains age 65, one-twelfth of the amount
which is 70% of said XXXXXXXX'X highest authorized level of
annual compensation attained at any time while serving as an
employee of the COMPANY and (ii) during the period
commencing with the calendar month following XXXXXXXX
XXXXXXXX'X attainment of age 65 and ending on her death, one-
twelfth of the amount which is 56% of said XXXXXXXX'X
highest authorized level of annual compensation attained at
any time while serving as an employee of the COMPANY, in
each case reduced by the amount of spouse pension received
by XXXXXXXX XXXXXXXX under COMPANY's Salaried Employees
Pension Plan. The foregoing monthly payments shall be
separate and distinct from income paid from any other
source, including any pension, retirement or insurance plan.
4. In the event that said XXXXXXXX should die after the
commencement of retirement referred to in Paragraph 1, or
while on disability as provided in Paragraph 2, hereof, the
COMPANY, in recognition of the services rendered by said
XXXXXXXX, shall pay unto XXXXXXXX XXXXXXXX, in the event she
survives him, for the remaining lifetime period of said
XXXXXXXX XXXXXXXX, an annual sum equal to 56% of said
XXXXXXXX'x highest authorized level of annual compensation
attained at any time while serving as an employee of
COMPANY, reduced by the amount of spouse pension received by
XXXXXXXX XXXXXXXX under the COMPANY's Salaried Employees
Pension Plan. This annual sum shall be payable in monthly
installments and be separate and distinct from income paid
to XXXXXXXX XXXXXXXX from any other source, including any
pension, retirement or insurance plan.
5. Attached and made a part hereof as Exhibit A is a
computation of the entitlements of XXXXXXXX which is based,
for illustrative purposes, on XXXXXXXX'x highest authorized
level of annual compensation attained as of the date of this
agreement. The parties stipulate to the methodology of
Exhibit A and that the computations shall change as XXXXXXXX
attains higher levels of authorized annual income with
COMPANY. The terms and provisions hereof shall extend to
and be binding upon the successors and assigns of the
COMPANY.
6. The parties agree that the cost and expense of
enforcement of this Agreement in the event of any breach,
contest or challenge to said Agreement should in fairness
and equity be borne by COMPANY or its successor, and that:
A. COMPANY or its successor will defend, protect, indemnify
and hold XXXXXXXX and XXXXXXXX XXXXXXXX harmless against any
and all damages, claims, demands and litigation growing out
of or related to the said Agreement.
B. COMPANY or its successor will pay or reimburse XXXXXXXX
and XXXXXXXX XXXXXXXX for all costs and expenses including
but not limited to any and all attorneys' fees of any and
all attorneys selected and retained by XXXXXXXX or XXXXXXXX
XXXXXXXX as a result of any claim, demand, investigation,
litigation or other activity arising in any manner, way or
means out of the said Agreement brought or undertaken by
COMPANY, XXXXXXXX or XXXXXXXX XXXXXXXX or any other person
or entity, for which an attorney is reasonably necessary or
desirable to enforce or protect the rights of XXXXXXXX or
XXXXXXXX XXXXXXXX or to protect them from and against any
action of any kind whatsoever brought by COMPANY or any
other person or entity against them or affecting any of
their rights, entitlements or benefits under the said
Agreement. The obligations of COMPANY or its successor, as
the case may be, herein shall also extend and apply to the
successors, heirs and beneficiaries of XXXXXXXX.
X. XXXXXXXX shall fully cooperate with COMPANY, to the
extent reasonably possible, in assisting it with expertise,
testimony and documents in the defense of COMPANY, its
officers and employees against any claim, demand or
litigation brought by any person or entity against COMPANY,
its officers or employees, as a result of said Agreement,
provided, however, that XXXXXXXX shall have no obligation to
cooperate with COMPANY under any circumstances where there
is an actual or potential conflict of interest between
XXXXXXXX and COMPANY.
D. The parties further agree that there can be no exact
measure of the damage which would occur to XXXXXXXX or
XXXXXXXX XXXXXXXX in the event of a denial or diminution of
their rights under this Agreement by change of control,
breach, delay, litigation, court decision, unilateral action
or otherwise. Therefore in the event of any actual or
threatened denial or diminution of said rights, XXXXXXXX and
XXXXXXXX XXXXXXXX shall be entitled to receive, upon their
sole election, a lump sum payment from COMPANY or its
successor, calculated pursuant to the procedure illustrated
in the attached Exhibit B, payable within thirty (30) days
of XXXXXXXX'x or XXXXXXXX XXXXXXXX'x written notice to the
COMPANY of their election to accept said lump sum payment in
lieu of the supplemental retirement income and supplemental
disability income payable under this Agreement. Such
payment shall be considered as liquidated damages and not as
a penalty to COMPANY. The numbers used in the attached
Exhibit B, are provided merely as an illustration with
actual numbers to be used as determined on the date of any
election hereunder by XXXXXXXX or XXXXXXXX XXXXXXXX. All
obligations of COMPANY or its successor pursuant to this
Paragraph shall also extend and apply to XXXXXXXX XXXXXXXX.
E. The parties agree that notwithstanding anything to the
contrary contained herein, at anytime after said XXXXXXXX or
XXXXXXXX XXXXXXXX become entitled to receive payments under
the applicable provisions of Paragraph 1, 2, 3 or 4 hereof,
said XXXXXXXX or, after said XXXXXXXX'x death or incapacity
XXXXXXXX XXXXXXXX, may elect to receive an immediate lump
sum payment in lieu of the monthly installments prescribed
by the provisions of the applicable Paragraph, in which case
such lump sum amount shall be calculated pursuant to the
procedure illustrated in the attached Exhibit B and shall be
reduced by a ten percent (10%) penalty.
7. Except as provided in Xxxxxxxxx 0, 0, xxx 0X, XXXXXXXX
shall not receive any benefits under this agreement, absent
approval of the Board of Directors of the COMPANY, in the
event that he voluntarily retires before age 62; provided,
however, XXXXXXXX shall not be deemed to have voluntarily
retired within the meaning of the foregoing if he retires
after the Board of Directors of the COMPANY, without his
approval, has reduced the scope of his authority or the
level of his compensation, or threatens to do so, other than
as a result of XXXXXXXX'x wilful and material misconduct.
All benefits under this Agreement shall be forfeited in the
event said XXXXXXXX remains as an active employee of the
COMPANY beyond the age of 65. However, the portion of the
supplemental executive retirement benefit that represents
restoration of benefits that cannot otherwise be funded
through the COMPANY's Salaried Employees Pension Plan due to
Internal Revenue Service limits shall vest under the same
terms as provided in that Plan. In addition, any income
from a pension restoration plan for highly paid employees,
should such plan be enacted by the COMPANY, shall be an
offset to the supplemental pension benefit described herein.
8. This Agreement is unfunded and not tax-qualified. The
parties acknowledge and agree that the COMPANY's obligation
to pay the benefits provided herein is an unfunded
contractual obligation and said XXXXXXXX and XXXXXXXX
XXXXXXXX shall have only the rights of general unsecured
creditors of the COMPANY with respect to such benefits.
Except as provided herein, or as otherwise expressly
consented to by the COMPANY in writing, XXXXXXXX may not
transfer his rights to receive payments hereunder, whether
by sale, assignment, pledge or otherwise.
9. Nothing in this Agreement shall be deemed to constitute
a contract of employment between the COMPANY and said
XXXXXXXX or an agreement to continue the services of
XXXXXXXX on the Board of Directors of the COMPANY. The
parties acknowledge and agree that said XXXXXXXX'x
employment with the COMPANY is and shall continue to be "at
will" and may be terminated at any time for any reason, or
without reason, subject to the terms of any written
employment agreement that may exist from time to time
between the parties.
10. This Agreement shall supersede the 1995 Agreement and
the 1995 Agreement shall terminate and be of no further
force or effect from and after the date hereof.
11. The COMPANY's performance under this Agreement,
including the obligation to pay the benefits provided
hereunder to said XXXXXXXX and XXXXXXXX XXXXXXXX is
guaranteed by SIGCORP, Inc. In the event that the COMPANY
fails, for any reason, to perform its obligations hereunder,
including its obligation to make timely payment of any
amounts hereunder, SIGCORP, Inc. shall be required to pay
such amounts immediately and to otherwise perform the
obligations of Company hereunder. The undertaking of
SIGCORP, Inc. hereunder is a guaranty of payment and
performance, and not a guaranty of collection. In the event
of a default of COMPANY hereunder, XXXXXXXX and XXXXXXXX
XXXXXXXX shall be entitled to seek payment and performance
from SIGCORP, Inc. without notice to or demand upon COMPANY
or SIGCORP, Inc., and without attempting first to seek
performance and payment from COMPANY. XXXXXXXX and XXXXXXXX
XXXXXXXX shall be entitled to recover from SIGCORP, Inc.
their attorney fees, court costs and expenses in the event
of the initiation of any claim, suit, action, proceeding or
investigation to enforce, protect or interpret their rights,
entitlements or benefits hereunder. The obligations of the
COMPANY and SIGCORP, Inc. under this Agreement shall be
binding upon successors and assigns of the COMPANY and
SIGCORP, Inc., respectively, including any party acquiring
substantially all of the assets or business of the COMPANY
and SIGCORP, Inc. (as the case may be). Each of the COMPANY
and SIGCORP, Inc. shall require any such successor or assign
to expressly assume and agree to perform its obligations
hereunder.
IN WITNESS WHEREOF, the COMPANY has caused the execution
hereof and the affixing hereto of its corporate seal by its
duly authorized officers and XXXXXXXX has hereunto set his
hand and seal on the day and date first above written.
SOUTHERN INDIANA GAS AND ELECTRIC COMPANY
By Xxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxx, Vice President,
Secretary and Treasurer
"COMPANY"
ATTEST:
X. X. Xxxxxxx
X. X. Xxxxxxx
Assistant Secretary
Xxxxxx X. Xxxxxxxx
Xxxxxx X. Xxxxxxxx
"XXXXXXXX"
SIGCORP, INC.
By X. X. Xxxxxx
X. X. Xxxxxx, Secretary and Treasurer
GUARANTOR
ATTEST:
X. X. Xxxxxxx
Xxxxx X. Xxxxxxx, Assistant Secretary
APPENDIX
"Change in Control" shall mean and shall be deemed to have
occurred upon the happening of any one or more of the
following:
(a) An acquisition (other than directly from SIGCORP) of
any voting securities of SIGCORP, Inc. ("SIGCORP") (the
"Voting Securities") by any "Person" (as the term person is
used for purposes of Section 13(d) or 14(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange
Act")), immediately after which such Person has "Beneficial
Ownership" (within the meaning of Rule 13d-3 promulgated
under the Exchange Act) of twenty percent (20%) or more of
the combined voting power of SIGCORP's then outstanding
Voting Securities; provided, however, that in determining
whether a Change in Control has occurred, Voting Securities
which are acquired in a "Non-Control Acquisition" (as
hereinafter defined) shall not constitute an acquisition
which would cause a Change in Control. A "Non-Control
Acquisition" shall mean an acquisition by (i) an employee
benefit plan (or a trust forming a part thereof) maintained
by (A) SIGCORP or (B) any corporation or other Person of
which a majority of its voting power or its voting equity
securities or equity interest is owned, directly or
indirectly, by SIGCORP (for purposes of this definition, a
"Subsidiary") (ii) SIGCORP or its Subsidiaries, or (iii) any
Person in connection with a "Non-Control Transaction" (as
hereinafter defined);
(b) The individuals who, as of the date of this Agreement,
are members of the Board of Directors of SIGCORP (the
"Incumbent Board"), cease for any reason to constitute a
majority of the members of the Board of Directors of
SIGCORP; provided, however, that if the election, or
nomination for election by SIGCORP's common stockholders, of
any new director was approved by a vote of a majority of the
Incumbent Board, such new director shall, for purposes of
this Plan, be considered as a member of the Incumbent Board;
provided, further, however, that no individual shall be
considered a member of the Incumbent Board if such
individual initially assumed office as a result of either an
actual or threatened "Election Contest" (as described in
Rule 14a-11 promulgated under the Exchange Act) or other
actual or threatened solicitation of proxies or consents by
or on behalf of a Person other than the Board of Directors
of SIGCORP (a "Proxy Contest") including by reason of any
agreement intended to avoid or settle any Election Contest
or Proxy Contest; or
(c) A merger, consolidation or reorganization involving
SIGCORP, unless such merger, consolidation or reorganization
is a "Non-Control Transaction." A "Non-Control Transaction"
shall mean a merger, consolidation or reorganization of
SIGCORP where:
(i) the stockholders of SIGCORP, immediately before such
merger, consolidation or reorganization, own directly or
indirectly immediately following such merger, consolidation
or reorganization, at least seventy-five percent (75%) of
the combined voting power of the outstanding voting
securities of the corporation resulting from such merger or
consolidation or reorganization (the "Surviving
Corporation") in substantially the same proportion as their
ownership of the Voting Securities immediately before such
merger, consolidation or reorganization,
(ii) the individuals who were members of the Board of
Directors of SIGCORP immediately prior to the execution of
the agreement providing for such merger, consolidation or
reorganization constitute a majority of the members of the
board of directors of the Surviving Corporation, or a
corporation beneficially owning, directly or indirectly, a
majority of the Voting Securities of the Surviving
Corporation, and
(iii) no Person other than (1) SIGCORP, (2) any Subsidiary,
(3) any employee benefit plan (or any trust forming a part
thereof) maintained by SIGCORP, the Surviving Corporation,
or any Subsidiary, or (4) any Person who, immediately prior
to such merger, consolidation or reorganization had
Beneficial Ownership of twenty percent (20%) or more of the
then outstanding Voting Securities), has Beneficial
Ownership of twenty percent (20%) or more of the combined
voting power of the Surviving Corporation's then outstanding
voting securities.
(d) The sale or other disposition of all or substantially
all of the assets of SIGCORP to any Person (other than a
transfer to a Subsidiary).
Notwithstanding the foregoing, a Change in Control shall not
be deemed to occur solely because any Person (the "Subject
Person") acquired Beneficial Ownership of twenty percent
(20%) or more of the Voting Securities as a result of the
acquisition of Voting Securities by SIGCORP or any
Subsidiary which, by reducing the number of Voting
Securities then outstanding, increases the proportional
number of shares Beneficially Owned by the Subject Persons,
provided that if a Change in Control would occur (but for
the operation of this sentence) as a result of the
acquisition of Voting Securities by SIGCORP or such
Subsidiary, and after such share acquisition by the Company,
the Subject Person becomes the Beneficial Owner of any
additional Voting Securities which increases the percentage
of the then outstanding Voting Securities Beneficially Owned
by the Subject Person, then a Change in Control shall occur.
