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EXHIBIT 10(p)
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT, is made and entered into this 14th day of
December, 1995, by and between K N Energy, Inc., a Kansas corporation (the
"Company") and Xxxxxx X. Xxxxxxxx ("Executive").
W I T N E S S E T H:
WHEREAS, the Company wishes to employ Executive and Executive wishes to
take advantage of the business opportunities offered by the Company; and
WHEREAS, the Company wishes to assure itself of the services of Executive
for the period provided in this Agreement, and Executive is willing to serve in
the employ of the Company for said period.
NOW, THEREFORE, in consideration of the mutual covenants herein contained
and other good and valuable consideration, and intending to be legally bound
hereby, the parties hereto agree as follows:
Section 1. Employment. The Company agrees to employ Executive, and
Executive agrees to be employed by the Company, for the period stated in
Section 3 herein and upon the other terms and conditions herein provided.
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Section 2. Position and Duties. During the period of Executive's
employment hereunder and except for temporary illness and vacation periods in
accordance with the Company's policies for executive employees as modified by
this Agreement, Executive shall devote all of the Executive's business time,
attention, skill, and efforts to the faithful performance of Executive's duties
hereunder. Executive shall be an executive officer of the Company and shall
perform such duties as are necessary to carry out Executive's responsibilities
as a corporate Vice President of the Company, and President of K N Energy
Services, Inc., a wholly owned subsidiary of the Company, including such duties
as may be assigned to Executive from time to time by the President and Chief
Executive Officer of the Company. Executive shall have responsibility, and
commensurate authority for development of new products and services and
marketing of products and services in various business segments of the Company
including retail consumer and agribusiness. Executive shall also have such
marketing and other responsibilities as requested by the President and Chief
Executive Officer (e.g. assisting with development of investor relations
programs, communication with customers and acquisitions).
Section 3. Term of Employment. The period of Executive's employment
under this Agreement shall commence as of January 1, 1996. It shall continue,
subject to the other provisions of this Agreement, until January 1, 1998 and
thereafter for one successive one-year period unless earlier terminated
pursuant to Section 14. Subsequent to completion of the one year term
extension, if the term is extended and Executive's employment is not then
terminated pursuant to Section 14(b), this Agreement shall be deemed terminated
and of no further force or effect.
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Section 4. Base Salary. For all services rendered by Executive in any
capacity during Executive's employment under this Agreement, including, without
limitation, services as an executive, officer, director, or member of any
committee of the Company or of any subsidiary, affiliate or division thereof,
the Company shall pay Executive a base salary at the annual rate of not less
than $202,000, which amount includes a car allowance of $12,000 per year. Such
base salary shall be payable in accordance with the customary executive payroll
practices of the Company, but in no event less frequently than monthly;
provided, however, that Executive shall not be entitled to any salary while
receiving payments under any written policy with respect to disability which
may be adopted by the Company and then in effect. Executive's base salary
shall be reviewed annually and may be increased from time to time if the
Company determines that an increase is appropriate in its sole discretion.
Section 5. Benefits. Executive shall receive such sick leave, disability
pay, health insurance and other benefits in addition to salary and bonuses as
are provided to, and on the same basis, as the other executive management
employees of the Company with a prior service credit of one year. With regard
to health benefits, the Company shall provide a waiver for a preexisting
condition related to the pregnancy of Executive's spouse.
Section 6. Vacation. Executive shall receive four weeks of paid vacation
per year.
Section 7. Reimbursement of Expenses. The Company shall pay or reimburse
Executive for all reasonable, ordinary and necessary travel and other expenses
incurred by
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Executive in the performance of Executive's obligations under this Agreement,
in accordance with the Company's travel and expense reimbursement policies for
executive management employees.
Section 8. Relocation Costs. Executive shall receive the Company's
standard relocation allowance, which shall include an amount to cover taxes
which will be equal to two months base salary, payable on January 4, 1996.. In
addition, Executive shall receive a housing allowance in accordance with the
Company's housing relocation policies for executive management employees. The
Company shall purchase or cause to be purchased, for cash, Executive's existing
residence in Atlanta, Georgia at the higher of (i) Executive's cost of such
residence or (ii) the average of two appraisals of such residence. The
purchase will be closed, and the purchase price paid to Executive in
immediately available funds, on or before January 2, 1996.
Section 9. Incentive Bonus. On an annual basis, the Compensation
Committee of the Board of Directors of the Company shall review Executive's
performance, the results of the Company for the prior year and such other
factors as are deemed to be appropriate from time to time and determine what
incentive bonus, if any, is appropriate to be paid to Executive. Such
incentive bonus shall be awarded in accordance with the terms of the Company's
Executive Incentive Plan and shall be based on the Level II Benefits with a
midpoint base salary comparison of $250,000. The Executive Incentive Plan
Level II Benefits provisions shall not be modified as they apply to Executive
in any manner materially detrimental to Executive except for
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modifications that apply similarly to all executives of the Company who
participate in the Company's Executive Incentive Plan based on Level II
Benefits.
Section 10. Restricted Stock. On January 4, 1996 Executive shall be
issued 7,500 shares of Restricted Stock, subject to performance-based criteria
set forth in a restricted stock agreement to be agreed to by Executive and the
Company. Vesting will accrue at the rate of 2,500 shares on January 4, 1996
and 2,500 shares each January 1 thereafter for the next two years. Any
dividends upon restricted stock which has not vested shall be held by the
Company until the stock vests.
Section 11. Stock Options. On January 4, 1996 the Company shall grant to
Executive 20,000 Incentive Stock Options pursuant to the Company's Incentive
Compensation Plan. Vesting will accrue at the rate of 4000 shares on January
4, 1996 and 4000 shares each January 1 thereafter for the next four years. Any
of such options that are not qualified Incentive Stock Options for federal
income tax purposes will be covered by a separate option agreement.
Section 12. Signing Bonus. The Company shall award to Executive a signing
bonus of $50,000 payable on January 4, 1996.
Section 13. Severance Agreement. Executive shall execute a Key Employee
Severance Agreement similar to such agreements signed by other executive
management employees of the Company.
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Section 14. Termination.
(a) For cause. The Company may at any time, in its sole
discretion, terminate the employment of Executive hereunder, for cause, by
written notice to Executive. For purposes hereof, "cause" shall mean (i) a
material breach of this Agreement by Executive which causes material harm to
the Company (ii) gross negligence or willful misconduct by Executive in the
performance of his duties under this Agreement which causes material harm to
the Company (iii) conviction of a felony; or (iv) conviction of a misdemeanor
involving moral turpitude.
(b) Non-renewal. Either party may terminate this Agreement
effective at the end of the initial two-year term or at the end of the
subsequent one-year renewal term by written notice to the other delivered on or
before the date two weeks prior to the end of such initial or renewal term.
(c) Obligations following termination for cause. In the event of
termination of Executive's employment by the Company pursuant to paragraph
14(a) neither party shall have any further obligations to the other under this
Agreement except the Company's obligations under paragraph 14(e), obligations
that accrued prior to the date of termination and Executive's obligations under
Section 15 hereof.
(d) Obligations following non-renewal. Upon a termination of
Executive's employment by the Company at the end of the initial term or during
the renewal term hereof pursuant to paragraph 14(b), the Company shall continue
to pay to Executive, in addition to accrued unpaid amounts, Executive's base
monthly salary for a period of one year following the termination and Executive
shall comply with all of the obligations of Executive under
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Section 15 hereof. In the event Executive materially breaches any of his
obligations under Section 15 hereof during such one year period, the Company
shall be entitled to discontinue such payments. Following any such
termination, the Company shall perform the obligations set forth in paragraph
14(e).
(e) Insurance and Stock. Upon any termination of Executive's
employment hereunder, the Company shall (i) permit Executive to continue
insurance benefits at Executive's expense in accordance with the terms of the
Company's benefit plans and insurance policies, and applicable law; (ii)
deliver to Executive certificates representing shares of the Company's stock to
which Executive's rights under any restricted stock plan or agreement vested
prior to the date of termination, and (iii) allow Executive to exercise, in
accordance with the terms of applicable stock option plans and agreements, any
stock options which vested prior to the date of termination.
Section 15. Non-Competition Covenant. Executive shall not, during the
term of Executive's employment by the Company and for the one-year period
immediately following termination of Executive's employment by the Company
pursuant to paragraphs 14(a) or by either party pursuant to paragraph 14(b),
(a) act as an officer, director, employee, partner, or agent of, or invest in
or lend money to, or own, directly or indirectly, any interest in, or
participate in the control of, any corporation, partnership, joint venture or
other business organization which is engaged in the provision of any product or
services which may be offered or sold by the Company from time to time in the
future prior to the end of Executive's employment; (b) solicit from any
employee or consultant of the Company, or supply to any person, information
pertaining to any customer or customer prospect of the Company or; (c)
interfere with the contractual relationship between the Company and any
customer of the
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Company. For purposes of this Agreement, "Customer" shall refer, in addition
to those persons to which services are sold by the Company, to those persons
with which the Company has established strategic marketing, services or other
alliances.
Notwithstanding anything to the contrary in clause (a) of the first
sentence of this Section 15, Executive shall be permitted, at any time after
any termination of Executive's employment with the Company:
(i) to invest in and own not more than 1% of the outstanding stock of
any publicly traded corporation;
(ii) to have any of the relationships described in clause (a) with any
business organization engaged primarily in the telecommunications
business;
(iii) to have any of the relationships described in clause (a) with any
business that is not primarily a utility that is pursuing a
strategy to integrate services; and
(iv) to have any of the relationships described in clause (a) with any
business organization that is not marketing to consumers in the
same geographic areas where the Company offers and sells products
and services to consumers as of the effective date of termination
of Executive's employment under this Agreement.
Executive (i) recognizes the significance of the provisions of this Section
15 and that they are required for the protection of legitimate business
interests of the Company; (ii) that the Company would not, in the absence of
such provisions, employ Executive or entrust to Executive the significant
management responsibilities and customer development and customer satisfaction
responsibilities for major customers of the Company which will be entrusted to
Executive; (iii) there will be no practical way to separate the portions of the
Company's information which is confidential information (as hereinafter
defined) created by the Company's investment and that
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information which is discernible from other sources; (iv) acknowledges that the
provisions of this Section 15 are reasonable in terms or duration, geography,
and types and limits of activities; and (v) acknowledges that the Company will
be making major investments based to a considerable degree upon Executive's
advice in reliance upon Executive's covenant not to compete contained in this
Section 15. If the covenant not to compete in this Section 15 is found by any
court to be overly-broad in extent, as to the time period or as to the
geographic area designated, the parties agree that it shall nevertheless be
effective, but it shall be deemed to be amended to the extent determined by
such court to be reasonable and enforceable to the greatest possible extent,
and as so amended, shall be fully enforced.
Section 16. Confidential Information. Executive shall not, except in the
performance of Executive's duties hereunder and for the benefit of the Company,
disclose or reveal to any unauthorized person any confidential information of
the Company relating to the Company, to its subsidiaries or affiliates, or to
any of the businesses operated by them, and Executive confirms that such
information constitutes the exclusive property of the Company.
Section 17. Company's Remedies Upon Breach. Executive acknowledges that
the Company's remedy at law for a breach by Executive of the provisions of
Sections 15 and 16 hereof will be inadequate. Accordingly, in the event of the
breach or threatened breach by Executive of any of Sections 15 and 16 hereof,
the Company shall be entitled to injunctive relief in addition to any other
remedy to which it may be entitled.
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Section 18. Tax Withholding. The Company may withhold from any benefits
payable under this Agreement all federal, state, city or other taxes as shall
be required pursuant to any law or governmental regulation or ruling.
Section 19. Nonassignability. This Agreement shall inure to the benefit
of, and be binding upon, Executive and Executive's personal or legal
representatives, executives, administrators, successors, heirs, distributees,
devisees and legatees, and the Company, and its successors and assignees,
provided, however, that neither Company nor Executive may assign any of
Executive's or its rights or benefits hereunder without the prior written
consent of the other.
Section 20. No Attachment. Except as required by law, the right to
receive payments under this Agreement shall not be subject to anticipation,
commutation, alienation, sale, assignment, encumbrance, charge, pledge, or
hypothecation or to execution, attachment, levy or similar process or
assignment by operation of law, and any attempt, voluntary or involuntary, to
effect any such action shall be null, void ab initio and of no effect.
Section 21. Amendment of Agreement. This Agreement may not be modified or
amended except by an instrument in writing signed by the parties hereto.
Section 22. No Implied Waiver. No forbearance from enforcing any right
hereunder shall be deemed to be a waiver of such right. No provision of this
Agreement shall be deemed to have been waived, nor shall there by any estoppel
against the enforcement of any provision of
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this Agreement, except by written instrument of the party charged with such
waiver or estoppel. No such written waiver shall be deemed a continuing waiver
unless specifically stated therein, and each such waiver shall operate only as
to the specific term or conditions waived and shall not constitute a waiver of
such term or condition for the future or as to any act other than that
specifically waived.
Section 23. Notice. For the purposes of this Agreement, notices and all
other communications provided for in the Agreement shall be in writing and
shall be deemed to have been duly given when received in fact.
Section 24. Severability; Enforceability. If, for any reason, any
provision of this Agreement is held invalid, such invalidity shall not affect
any other provision of this Agreement not held so invalid, and each such other
provision shall to the full extent consistent with law continue in full force
and effect. If any provision of this Agreement shall be held invalid in part,
such invalidity shall in no way affect the rest of such provision not held so
invalid, and the rest of such provision, together with all other provision of
this Agreement, shall to the full extent consistent with law continue in full
force and effect.
Section 25. Headings. The headings of sections and paragraphs herein are
included solely for convenience of reference and shall not control the meaning
or interpretation of any of the provisions of this Agreement.
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Section 26. Governing Law This Agreement has been executed and delivered
in the State of Colorado, is intended to be performed primarily within such
State, and its validity, interpretation, performance, and enforcement shall be
governed by the laws of such State.
Section 27. Entire Agreement. This instrument contains the entire
agreement of the parties with respect to the subject matter hereof and shall
supersede all other prior written or oral representations and agreements, if
any, between the parties with respect thereto; and neither party is relying
upon such prior representations or agreements in entering into this Agreement.
Section 28. Counterparts. This Agreement may be executed in as many
counterparts as may be deemed necessary and convenient, and by the different
parties on separate counterparts, each of which shall be deemed an original but
all of which shall constitute one and the same instrument.
IN WITNESS WHEREOF, the Company and Executive have caused this Agreement to
be executed as of the day and year first above written.
K N ENERGY, INC.
By /s/ XXXXX X. XXXX
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President and Chief Executive Officer
EXECUTIVE
/s/ XXXXXX X. XXXXXXXX
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Xxxxxx X. Xxxxxxxx
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