Exhibit 10.5
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 Xxxxxx X. Xxxxxxxx (the
"Executive");
WHEREAS, the Executive is currently
serving as President of Southern California Gas Company, a
California corporation and a subsidiary of Pacific Enter-
prises, 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 canceled
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 of the Merger. 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. During the period commencing on the Effective
Date the Executive shall serve as President and Principal
Executive Officer of the businesses of the Company and its
subsidiaries that are economically regulated by the
California Public Utilities Commission (the "Regulated
Subsidiaries") with such authority, duties and
responsibilities with respect to such position as set forth
in subsection (b) hereof. In this capacity, the Executive
shall report to the Office of the Chairman or if the Office
of the Chairman does not exist, the Chief Executive Officer
of the Company. The titles, authority, duties and
responsibilities set forth in subsection (b) hereof may be
changed from time to time but only with the mutual written
agreement of the Executive and the Company.
(b)Duties of the President and Principal Executive
Officer. The duties of the President and Principal
Executive Officer of the Company's Regulated Subsidiaries
shall include but not be limited to directing the overall
business, affairs and operations of the Company's Regulated
Subsidiaries, through the officers of such subsidiaries,
all of whom shall report directly or indirectly to the
Executive.
(c) 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
in no event be no less than $440,000 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 increases 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 awards thereunder providing him
with the opportunity to earn, on a year-by-year basis,
annual and long-term incentive compensation (the "Incentive
Compensation Awards") at least equal (in terms of target,
maximum and minimum awards expressed as a percentage of
Annual Base Salary) to the Executive's opportunities that
were in effect prior to the Effective Date. 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
Sections 2(a) and 2(b) of this Agreement; (ii) a
reduction by the Company in (A) the Executive's Annual Base
Salary as in effect on the date hereof or as the same may
be in- creased from time to time or (B) the Executive's
aggregate annualized compensation and benefits
opportunities, except, in the case of both (A) and (B), for
across-the-board reductions similarly affecting all
executives (both of the Company and of any Person (as
hereinafter defined) then in control of the Company) whose
compensation is directly determined by the compensation
committee of the Board (and the compensation committee of
the board of directors of any Person then in control of the
Company); provided that, the exception for across-the-board
reductions shall not apply following a Change in Control
(as hereinafter defined); (iii) the Company's
requiring the Executive to be based anywhere other than
the principal place of business of the Regulated Subsidiar-
ies (or permitted relocation thereof); or a substantial
increase in the Executive's business travel obligations
outside of the Southern California area as of the
Effective Date, other than any such increase that (A)
arises in connection with extraordinary business
activities of the Company and (B) is understood not to be
part of the Executive's regular duties with the Company;
(iv) the failure by the Company to pay to the Executive
any portion of the Executive's current compensation and
benefits or to pay to the Executive any portion of an
installment of deferred compensation under any deferred
compensation program of the Company within thirty (30) days
of the date such compensation is due; (v) 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; (vi) 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 (vii) 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 outstand-
ing 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, shall not be less
than thirty (30) days for reasons other than cause 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 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 equivalent 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 Termi-
nation 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 Tax is 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 Execu-
tive 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 Company's Senior Vice
President, Public Policy (or, if such position is vacant,
the Company's Chief Executive Officer), provided, that the
Company shall not unreasonably classify information as
Proprietary Information.
10. Non-Solicitation of Employees.
The Executive recognizes that he possesses
and will possess confidential information about other
employees of the Company, its subsidiaries and affiliates
relating to their education, experience, skills, abilities,
compensation and benefits, and inter-personal relationships
with customers of the Company, its subsidiaries and
affiliates. The Executive recognizes that the information
he possesses and will possess about these other employees
is not generally known, is of substantial value 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
Company's Vice President, Human Resources (or, if such
position is vacant, the Company's Chief Executive Officer),
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 substan-
tially 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 includ-
ing, 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
__________________________
Xxxxxx X. Xxxxxxxx
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].
___________________________
