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EXHIBIT 10.67(b)
FIRST AMENDMENT TO EXECUTIVE EMPLOYMENT AGREEMENT
This Agreement, entered into on this 14th of March, 1999, and made
effective as of February 1, 1999, by and between ENRON OIL & GAS COMPANY
("Company" or "Employer") and XXXXX X. XXXXXX ("Employee") is an amendment to
that certain Employment Agreement made effective as of March 1, 1998 (the
"Employment Agreement").
WHEREAS, the parties desire to amend the Employment Agreement as
provided herein;
NOW, THEREFORE, in consideration thereof and of the mutual covenants
contained herein, the parties agree as follows:
1. Article 3, Section 3.5 of the Employment Agreement is hereby
deleted in its entirety and the following is substituted
therefor:
"3.5 Upon an Involuntary Termination of the employment
relationship by either Employer or Employee prior to the
expiration of the Term, Employee shall be entitled, in
consideration of Employee's continuing obligations hereunder
after such termination (including, without limitation,
Employee's non-competition obligations), to receive one
hundred twenty-five percent (125%) of the then current Monthly
Base Salary as if Employee's employment (which shall cease on
the date of such Involuntary Termination) had continued for
the full Term of this Agreement. Notwithstanding any other
provisions of this Agreement, a termination of the employment
relationship by either the Employer or Employee which meets
the definition of Involuntary Termination under the Company's
Change of Control Severance Plan shall constitute an
Involuntary Termination under this Agreement. In the event of
such Involuntary Termination which entitles Employee to
severance benefits under said Plan, but for the following
severance payment by the Company to the Employee, Employee
shall receive from the Company a severance benefit under this
Agreement equal to the greater of (a) one hundred twenty-five
percent (125%) of the then current Monthly Base Salary as if
Employee's employment (which shall cease on the date of such
Involuntary Termination) had continued for the full Term of
this Agreement, or (b) the sum of Employee's then current
Monthly Base Salary times 12 times 2.99 plus two times the
Employee's annual bonus target award under the Company's
annual bonus program for the year in which the Change of
Control Date occurs. Employee's severance benefit payable
under said Plan, if any, shall be determined according to the
provisions thereof. Employee shall not be under any duty or
obligation to seek or accept other employment following
Involuntary Termination and
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the amounts due Employee hereunder shall not be reduced or
suspended if Employee accepts subsequent employment.
Employee's rights under this Section 3.5 are Employee's sole
and exclusive rights against Employer, Enron, or their
affiliates, and Employer's sole and exclusive liability to
Employee under this Agreement, in contract, tort, or
otherwise, for any Involuntary Termination of the employment
relationship. Employee covenants not to xxx or lodge any
claim, demand or cause of action against Employer for any sums
for Involuntary Termination other than those sums specified in
this Section 3.5. If Employee breaches this covenant, Employer
shall be entitled to recover from Employee all sums expended
by Employer (including costs and attorneys fees) in connection
with such suit, claim, demand or cause of action."
2. The last paragraph of Article 7, Section 7.1 is hereby deleted
in its entirety and the following is substituted therefor:
"These non-competition obligations shall extend until the
earlier of (a) expiration of the Term or (b) one year after
termination of the employment relationship; provided, however,
that upon an Involuntary Termination as defined in the
Company's Change of Control Severance Plan, which entitles
Employee to severance benefits under said Plan, these
non-competition obligations shall expire immediately and have
no further force and effect. Further, notwithstanding a change
of control of the Company, Employee may exercise his right to
voluntarily resign under Section 3.2(ii) upon the occurrence
of any one of the events described below and these
non-competition obligations shall expire immediately and have
no further force and effect, and the Employer shall have no
further obligations to Employee under this Agreement:
1. the Employer ceases to be an affiliate of Enron
Corp. as defined at Section 8.1;
2 the Employer undergoes a reorganization or change
in business circumstances such that Employee's duties
and responsibilities are substantially reduced; or
3. the Employee is asked to relocate outside the
Houston Metropolitan Area."
3. The following new Article 9 shall be inserted at the end of
the Employment Agreement:
"ARTICLE 9: U.S. EXCISE TAX INDEMNIFICATION
9.1 Indemnification. In the event it shall be
determined that any payment or distribution by the Company to
or for the benefit of
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Employee (whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement, the
Company's Change of Control Severance Plan or otherwise, but
determined without regard to any additional payments required
under this Article 9) (a "Payment") would be subject to the
excise tax imposed by Section 4999 of the United States
Internal Revenue Code of 1986, as amended (the "Code"), or any
interest or penalties are incurred by Employee 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 Employee shall be entitled to
receive an additional payment (a "Gross-Up Payment") in an
amount such that after payment by Employee of all taxes
(including any interest or penalties imposed with respect to
such taxes), including, without limitation, any income and
employment taxes (and any interest and penalties imposed with
respect thereto) and Excise Tax imposed upon the Gross-Up
Payment, Employee retains an amount of the Gross-Up Payment
equal to the Excise Tax imposed upon the Payments.
9.2 Determination of Amount. Subject to the
provisions of Section 9.3, all determinations required to be
made under this Article 9, 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 a public accounting firm
chosen by the Company (the "Accounting Firm") which shall
provide detailed supporting calculations both to the Company
and Employee if requested by either the Company or Employee.
All fees and expenses of the Accounting Firm shall be borne
solely by the Company. Any determination by the Accounting
Firm shall be binding upon the Company and Employee. As a
result of the uncertainty in the application of Section 4999
of the Code at the time of the initial determination by the
Accounting Firm hereunder, it is possible that Gross-Up
Payments which will not have been made by the Company should
have been made ("Underpayment"), consistent with the
calculations required to be made hereunder. In the event that
the Company exhausts its remedies pursuant to Section 9.3 and
Employee thereafter is required to make a payment of any
additional 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 Employee.
9.3 Contest of Claims. If the Company elects to
contest a claim by the Internal Revenue Service that Excise
Tax is due from Employee, Employee shall cooperate fully with
the Company in order to effectively contest such claim,
including, but not limited to providing information reasonably
requested by the Company relating to such claim, accepting
legal representation with respect to such claim by an attorney
reasonably selected by the Company and permitting the Company
to participate in any proceedings relating to such claim. The
Company shall
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bear and pay directly all costs and expenses (including
additional interest and penalties) incurred in connection with
such contest and shall indemnify and hold Employee harmless,
on an after-tax basis, for any Excise Tax or other tax
(including interest and penalties with respect thereto)
imposed as a result of such representation and payment of
costs and expenses.
9.4 Advances and Refunds. If the Company directs
Employee to pay a claim by the Internal Revenue Service and
xxx for a refund, the Company shall advance the amount of such
payment to Employee on an interest-free basis and shall
indemnify and hold Employee 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. If, after the receipt by Employee of an amount
advanced by the Company pursuant to this Section 9.4, Employee
becomes entitled to receive, and receives, any refund with
respect to such claim, Employee shall 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 Employee of an amount advanced by the
Company pursuant to this Section 9.4, a determination is made
that Employee is not entitled to any refund with respect to
such claim, then such advance 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."
This Agreement is the First Amendment to the Employment Agreement, and
the parties agree that all other terms, conditions and stipulations contained in
the Employment Agreement, and any amendments thereto, shall remain in full force
and effect and without any change or modification, except as provided herein.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the date first above written.
ENRON OIL & GAS COMPANY
By: /s/ XXXXXXXX XXXXXXX
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Name: Xxxxxxxx Xxxxxxx
Title: V.P. Human Resources & Administration
This 15th day of March, 1999
XXXXX X. XXXXXX
/s/ XXXXX X. XXXXXX
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This 14th day of March, 1999
