Exhibit 10.36
AMENDMENT NO. 1
TO THE
EMPLOYMENT AGREEMENT
BETWEEN
CALENERGY COMPANY, INC.
AND
XXXXX X. XXXXXXX
This Amendment No. 1 (the "Amendment") to the
Employment Agreement dated January 11, 1998 (the "Employment
Agreement") by and between CalEnergy Company, Inc., a Delaware
corporation (the "Company"), and Xxxxx X. Xxxxxxx (the
"Executive"), is entered into as of January 12, 1998.
WHEREAS, the Company and the Executive are presently
parties to the Employment Agreement; and
WHEREAS, the Company and the Executive desire to amend
the Employment Agreement as set forth herein;
NOW, THEREFORE, the Employment Agreement is hereby
amended as follows:
(1) By adding the following sentences at the end of
Section 4(c):
"The Executive shall also be eligible to be paid
other bonuses for each fiscal year as determined by
the Chairman of the Board. The Executive's annual
incentive merit bonus, together with all such other
bonuses paid or payable for the fiscal year
(including any amounts for which receipt is
otherwise deferred pursuant to a plan or
arrangement with the Company), is referred to
herein as `Annual Bonus Compensation.'"
(2) By adding the following sentence after the last
sentence of Section 6(a):
"The preceding sentence notwithstanding, if the
Executive's resignation occurs upon or after a
Change in Control, he shall not be precluded from
accepting employment or providing services to Xxxxx
Xxxxxx Sons', Inc. or any affiliate thereof."
(3) By deleting from the first sentence of Section
8(b) the language following the parenthetical "(iii)" and
replacing it with the following:
"commencing one month after the month of his
Termination Date, 24 monthly payments each equal to
1/24 of a sum equal to two times the average Annual
Bonus Compensation payable to the Executive in
respect of the two fiscal years immediately
preceding the year in which the Executive's
employment with the Company terminates (with any
such year for which no bonus was payable included
in such two year average as a zero)."
(4) By deleting current Section 8(d) and inserting
new Section 8(d), to read as follows:
"(d) If the employment of the Executive is
terminated pursuant to subsections (ii) or (vi) of
Section 7(a), any Performance Accelerated Stock
Options ("PASOs") held by the Executive on the
Termination Date will become vested and immediately
exercisable on such Termination Date and shall
otherwise remain exercisable for their term in
accordance with the terms thereof." "
(5) By inserting immediately following Section 8(d)
a new Section 8(e) to read as follows:
"(e) If the employment of the Executive is
terminated for any reason after a Change in
Control, then without further action by the
Company, the Board of any committee thereof, the
Executive may exercise any vested stock options
(including any vested PASOs) held by the Executive
pursuant to existing procedures approved by the
Stock Option Committee for cashless exercise, by
surrendering previously owned shares, electing to
have the Company withhold shares otherwise
deliverable upon exercise of such options, or by
providing an irrevocable direction to a broker to
sell shares and deliver all or a portion of the
proceeds to the Company, in any case in an amount
equal to the aggregate exercise price and any tax
withholding obligation attendant to the exercise."
(6) By inserting immediately following Section 8 a new
Section 8A, which shall read in its entirety as follows:
"Section 8A. Certain Additional
Payments by the Company.
(a) Anything in this Agreement to the
contrary notwithstanding, in the event it shall be
determined that any payment, distribution, waiver
of Company rights, acceleration of vesting of any
stock options or restricted stock, or any other
payment or benefit in the nature of compensation to
or for the benefit of the Executive, alone or in
combination (whether such payment, distribution,
waiver, acceleration or other benefit is made
pursuant to the terms of this Agreement or any
other agreement, plan or arrangement providing
payments or benefits in the nature of compensation
to or for the benefit of the Executive, but
determined without regard to any additional
payments required under this Section 8A) (a
"Payment") would be subject to the excise tax
imposed by Section 4999 of the Code (or any
successor provision) or any interest or penalties
are incurred by the Executive with respect to such
excise tax (such excise tax, together with any such
interest and penalties, are hereinafter
collectively referred to as the "Excise Tax"), then
the Executive shall be entitled to receive an
additional payment (a "Gross-Up Payment") in an
amount such that after payment by the Executive of
all taxes with respect to the Gross-Up Payment
(including any interest or penalties imposed with
respect to such taxes), including, without
limitation, any income taxes (and any interest and
penalties imposed with respect thereto) and Excise
Tax imposed upon the Gross-Up Payment, the
Executive retains an amount of the Gross-Up Payment
equal to the Excise Tax imposed upon the Payments.
(b) Subject to the provisions of
Section 8A(c), all determinations required to be
made under this Section 8A, including whether and
when a Gross-Up Payment is required and the amount
of such Gross-Up Payment and the assumptions to be
utilized in arriving at such determination, shall
be made by Deloitte and Touche LLP, or such other
nationally recognized accounting firm then auditing
the accounts of the Company (the "Accounting Firm")
which shall provide detailed supporting
calculations both to the Company and the Executive
within 15 business days of the receipt of notice
from the Executive that there has been a Payment,
or such earlier time as is requested by the
Company. In the event that the Accounting Firm is
unwilling or unable to its obligations pursuant to
this Section 8A, the Executive shall appoint
another nationally recognized accounting firm to
make the determinations required hereunder (which
accounting firm shall then be referred to hereunder
as the Accounting Firm). All fees and expenses of
the Accounting Firm shall be borne solely by the
Company. Any Gross-Up Payment, determined pursuant
to this Section 8A, shall be paid by the Company to
the Executive within five days of the receipt of
the Accounting Firm's determination. Any
determination by the Accounting Firm shall be
binding upon the Company and the Executive. The
parties hereto acknowledge that, as a result of the
potential uncertainty in the application of Section
4999 of the Code (or any successor provision) at
the time of the initial determination by the
Accounting Firm hereunder, it is possible that the
Company will not have made Gross-Up Payments which
should have been made consistent with the
calculations required to be made hereunder (an
"Underpayment"). In the event that the Company
exhausts its remedies pursuant to Section 8A(c) and
the Executive thereafter is required to make a
payment of any Excise Tax, the Accounting Firm
shall determine the amount of the Underpayment that
has occurred and any such Underpayment shall be
promptly paid by the Company to or for the benefit
of the Executive.
(c) The Executive shall notify the Company
in writing of any claim by the Internal Revenue
Service that, if successful, would require the
payment by the Company of the Gross-Up Payment.
Such notification shall be given as soon as
practicable but no later than 20 business days
after the Executive is informed in writing of such
claim and shall apprise the Company of the nature
of such claim and the date on which such claim is
requested to be paid. The Executive shall not pay
such claim prior to the expiration of the 30-day
period following the date on which he gives such
notice to the Company (or such shorter period
ending on the date that any payment of taxes with
respect to such claim is due). If the Company
notifies the Executive in writing prior to the
expiration of such period that it desires to
contest such claim, the Executive shall:
(i) give the Company any
information reasonably requested by the
Company relating to such claim,
(ii) take such action in connection
with contesting such claim as the Company
shall reasonably request in writing from time
to time, including, without limitation,
accepting legal representation with respect
to such claim by an attorney reasonably
selected by the Company,
(iii) cooperate with the Company in
good faith in order effectively to contest
such claim, and
(iv) permit the Company to
participate in any proceedings relating to
such claim;
providing, however, that the Company shall bear
and pay directly all costs and expenses (including
additional interest and penalties) incurred in
connection with such contest and shall indemnify
and hold the Executive harmless, on an after-tax
basis, for any Excise Tax or income tax (including
interest and penalties with respect thereto)
imposed as a result of such representation and
payment of costs and expenses. Without limiting
the foregoing provisions of this Section 8A(c), the
Company shall control all proceedings taken in
connection with such contest and, at its sole
option, may pursue or forgo any and all
administrative appeals, proceedings, hearings and
conferences with the taxing authority in respect of
such claim and may, at its sole option, either
direct the Executive to pay the tax claimed and xxx
for a refund or contest and claim in any
permissible manner, and the Executive agrees to
prosecute such contest to a determination before
any administrative tribunal, in a court of initial
jurisdiction and in one or more appellate courts,
as the Company shall determine; provided, however,
that if the Company directs the Executive to pay
such claim and xxx for a refund, the Company shall
advance the amount of such payment to the
Executive, on an interest-free basis, and shall
indemnify and hold the Executive harmless, on an
after-tax basis, from any Excise Tax or income tax
(including interest or penalties with respect
thereto) imposed with respect to such advance or
with respect to any imputed income with respect to
such advance; and further provided that any
extension of the statute of limitations relating to
payment of taxes for the taxable year of the
Executive with respect to which such contested
amount is claimed to be due is limited solely to
such contested amount. Furthermore, the Company's
control of the contest shall be limited to issues
with respect to which a Gross-Up Payment would be
payable hereunder and the Executive shall be
entitled to settle or contest, as the case may be,
any other issue raised by the Internal Revenue
Service or any other taxing authority.
(d) If, after the receipt by the
Executive of an amount advanced by the Company
pursuant to Section 8A(c), the Executive becomes
entitled to receive any refund with respect to such
claim, the Executive shall (subject to the
Company's complying with the requirements of
Section 8A(c)) promptly pay to the Company the
amount of such refund (together with any interest
paid or credited thereon after taxes applicable
thereto). If, after the receipt by the Executive
of an amount advanced by the Company pursuant to
Section 8A(c), a determination is made that the
Executive shall not be entitled to any refund with
respect to such claim and the Company does not
notify the Executive in writing of its intent to
contest such denial of refund prior to the
expiration of 30 days after such determination,
then such advance shall be forgiven and shall not
be required to be repaid and the amount of such
advance shall offset, to the extent thereof, the
amount of Gross-Up Payment required to be paid."
Except as provided herein and to the extent necessary
to give full effect to the provisions of this
Amendment, the terms of the Employment Agreement shall remain in
full force and effect.
IN WITNESS WHEREOF, the parties hereto have entered
into this Amendment effective as of January 12,1998.
CALENERGY COMPANY,
INC.
By:/s/ Xxxxx X. Xxxxx
Name: Xxxxx X. Xxxxx
Title: Chairman of the Board
EXECUTIVE
By:/s/ Xxxxx X. Xxxxxxx
Xxxxx X. Xxxxxxx
