Exhibit 10.26
FIRST AMENDMENT TO EMPLOYMENT AGREEMENT
This Agreement, made and entered into on this 7th day
of February, 2000, and made effective as of February 7,
2000, by and between Enron Corp., (Company") and Xxxxxxx X.
Xxx ("Employee"), is an amendment to that certain Employment
Agreement between the parties entered into and made
effective on December 9. 1996 (the "Employment Agreement").
WHEREAS, the parties desire to amend the Employment
Agreement as provided herein;
NOW, THEREFORE, for and in consideration of the
covenants contained herein, and for other good and valuable
considerations, the parties agree as follows:
1. Article 2, paragraph 2.1 shall be deleted in its
entirety and the following inserted in its place:
"2.1 TERM. Unless sooner terminated pursuant to
other provisions hereof, Company agrees to employ Employee
for the period (the "Term") beginning on the Effective Date
and ending on December 31, 2003, and thereafter for such
period, if any, as may be agreed upon in writing by Employee
and Company."
2. Article 2 is hereby amended by adding the following
paragraph 2.5:
"2.5 Should Employee remain employed by
Company beyond the expiration of the Term,
such employment shall convert to a month-to-
month relationship terminable at any time by
either Company or Employee for any reason
whatsoever, with or without cause. Upon such
termination of the employment relationship by
either Company or Employee for any reason
whatsoever, Employee shall be entitled to pro
rata salary through the date of such
termination, but Employee shall not be
entitled to any individual bonuses or
individual incentive compensation not yet
paid at the date of such termination and all
other future compensation to which Employee
is entitled and all future benefits for which
Employee is eligible shall cease and
terminate."
3. Article 3, Section 3.1 is hereby amended in its
entirety and the following is inserted in its place:
"3.1 Base Salary. During the period
beginning on the Effective Date and ending on
December 31, 1996, Employee shall receive an
annual base salary equal to $990,000 which
increased to 1.2 million dollars on May 1,
1997 and then increased to 1.3 million
dollars on May 1, 1998. Thereafter, during
the period of this Agreement, Employee shall
receive a minimum annual base salary equal to
$1,300,000. Employee's base salary shall be
reviewed annually and may be increased
annually and from time to time by the Board
of Directors (or the Compensation and
Management Development Committee of such
Board) in its sole discretion and, after any
such change, Employee's new level of base
salary shall be Employee's base salary for
purposes of this Agreement until the
effective date of any subsequent change.
Employee's annual base salary shall be paid
in equal installments in accordance with
Company's standard policy regarding payment
of compensation to executives; provided,
however, that Employee hereby irrevocable
elects and agrees that any base salary
payable to Employee pursuant to this
paragraph 3.1 in excess of $1,000,000 during
any taxable year of Company shall be deferred
under Company's 1994 Deferral Plan. Any
amounts deferred under Company's 1994
Deferral Plan pursuant to this paragraph 3.1
shall be subject to all of the terms and
conditions of such plan, including, without
limitation, the time of payment provisions
thereof."
4. Article 5, paragraph 5.1 is hereby deleted and the
following inserted in its place:
"5.1 As part of the consideration for the
compensation and benefits to be paid to
Employee hereunder, in keeping with
Employee's duties as a fiduciary and in order
to protect Company's interests in the
confidential information of Company and the
business relationships developed by Employee
with the clients and potential clients of
Company, and as an additional incentive for
Company to enter into this Agreement, Company
and Employee agree to the non-competition
provisions of this Article 5. Employee
agrees that during the period of Employee's
non-competition obligations hereunder,
Employee will not, directly or indirectly for
Employee or for others, in any geographic
area or market where Company or any of its
affiliated companies are conducting any
business as of the date of termination of the
employment relationship or have during the
previous twelve months conducted any
business:
(i) engage in any business competitive with
the business conducted by Company;
(ii) render advice or services to, or
otherwise assist, any other person,
association, or entity who is engaged,
directly or indirectly, in any business
competitive with the business conducted by
Company; or
(iii) induce any employee of Company or
any of its affiliates to terminate his or her
employment with Company or its affiliates, or
hire or assist in the hiring of any such
employee by person, association, or entity
not affiliated with Enron.
These non-competition obligations shall extend until the
latter of (a) expiration of the Term or (b) one year after
termination of the employment relationship."
5. Article 7, paragraph 7.1(i) is hereby deleted in its
entirety and the following inserted in its place:
"(i) Employee shall receive a lump sum
payment for each full calendar year of the
remaining Term of this Agreement equal to the
total of Employee's 2000 annual base salary
of $1,300,000, Employee's 1999 bonus payable
in 2000 of $3,900,000 and the 2000 long-term
grant value of $15,000,000."
6. Article 7, paragraph 7.2 is hereby deleted in its
entirety and the following inserted in its place:
"7.2 Certain Additional Payments by Company.
Notwithstanding anything to the contrary in
this Agreement, in the event that any
payment, distribution, or other benefit
provided by Company to or for the benefit of
Employee, whether paid or payable or
distributed or distributable pursuant to the
terms of this Agreement or otherwise (a
"Payment"), would be subject to the excise
tax imposed by Section 4999 of the Internal
Revenue Code of 1986, as amended, or any
interest or penalties with respect to such
excise tax (such excise tax, together with
any such interest or penalties, are
hereinafter collectively referred to as the
"Excise Tax"), Company shall pay to Employee
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 any Excise Tax imposed on
any Gross-up Payment, Employee retains an
amount of the Gross-up Payment equal to the
Excise Tax imposed upon the Payments.
Company and Employee shall make an initial
determination as to whether a Gross-up
Payment is required and the amount of any
such Gross-up Payment. Employee shall notify
Company immediately in writing of any claim
by the Internal Revenue Service which, if
successful, would require Company to make a
Gross-up Payment (or a Gross-up Payment in
excess of that, if any, initially determined
by Company and Employee) within five days of
the receipt of such claim. Company shall
notify Employee in writing at least five days
prior to the due date of any response
required with respect to such claim if it
plans to contest the claim. If Company
decides to contest such claim, Employee shall
cooperate fully with Company in such action;
provided, however, Company shall bear and pay
directly or indirectly all costs and expenses
(including additional interest and penalties)
incurred in connection with such action and
shall indemnify and hold Employee 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
Company's action. If, as a result of
Company's action with respect to a claim,
Employee receives a refund of any amount paid
by Company with respect to such claim,
Employee shall promptly pay such refund to
Company. If Company fails to timely notify
Employee whether it will contest such claim
or Company determines not to contest such
claim, then Company shall immediately pay to
Employee the portion of such claim, if any,
which it has not previously paid to
Employee."
7. Article 7, paragraph 7.6(iii) is hereby deleted in its
entirety and the following inserted in its place:
"(iii) "Involuntarily Terminated" shall
mean termination of Employee's employment
with Company (A) by Company for any reason
whatsoever except for Cause or (B) by
Employee for Good Reason."
8. Article 8 is hereby amended by adding the following
paragraph:
"8.15 If a dispute arises out of or
related to this Agreement and the dispute
cannot be settled through direct discussions,
Company and Employee agree that, except for
disputes arising out of a breach or alleged
breach of Articles 4 and 5, they shall to
first endeavor to settle the dispute in an
amicable fashion, including the use of a
mediator. If such efforts fail to resolve
the dispute, the dispute, and any dispute
arising under Articles 4 and 5, shall be
resolved as follows:
(a) Except as provided in Subsection (b), any and all
claims, demands, cause of action, disputes, controversies,
and other matters in questions arising out of or relating to
this Agreement, any provision hereof, the alleged breach
thereof, or in any way relating to the subject matter of
this Agreement, involving Company, Enron, Employee, and/or
their respective representatives, even through some or all
of such claims allegedly are extra-contractual in nature,
whether such claims sound in contract, tort, or otherwise,
at law or in equity, under state or federal law, whether
provided by statute or the common law, for damages or any
other relief, including all aspects of any disputes arising
out of Articles 4 or 5 [excepting only temporary or
preliminary injunctive relief as specified in subsection (b)
hereof] shall be resolved by binding arbitration pursuant to
the Federal Arbitration Act in accordance with the
Commercial Arbitration Rules then in effect with the
American Arbitration Association. The arbitration
proceeding shall be conducted in Houston, Texas. The
arbitration may be initiated by either party by the
providing to the other a written notice of arbitration
specifying the claims. Within thirty (30) days of the
notice of initiation of the arbitration procedure, each
party shall denominate one arbitrator. The two arbitrators
shall select a third arbitrator failing agreement on which
within thirty (30) days of the original notice, the parties
(or either of them) shall apply to the Senior Active United
States District Judge for the Southern District of Texas,
who shall appoint a third arbitrator. The three
arbitrators, utilizing the Commercial Arbitration Rules of
the American Arbitration Association, shall by majority vote
within 120 days of the selection of the third arbitrator,
resolve all disputes between the parties. There shall be no
transcript of the hearing before the arbitrators. The
arbitrators' decision shall be in writing, but shall be as
brief as possible. The arbitrators shall not assign the
reasons for their decision. The arbitrators' decision shall
be final and non-appealable to the maximum extent permitted
by law. Judgment upon any award rendered in any such
arbitration proceeding may be entered by any federal or
state court having jurisdiction. This agreement to
arbitrate shall be enforceable in either federal or state
court. The enforcement of this agreement to arbitrate and
all procedural aspects of this agreement to arbitrate,
including but not limited to, the construction and
interpretation of this agreement to arbitrate, the issues
subject to arbitration (i.e., arbitrability), the scope of
the arbitrable issues, allegations of waiver, delay or
defenses to arbitrability, and the rules governing the
conduct of the arbitration, shall be governed by and
construed pursuant to the Federal Arbitration Act and shall
be decided by the arbitrators. In deciding the substance of
any such claims, the arbitrators shall apply the substantive
laws of the State of Texas (excluding Texas choice-of-law
principles that might call for the application of some other
State's law); provided, however, it is expressly agreed that
the arbitrators shall have no authority to award treble,
exemplary, or punitive damages under any circumstances
regardless of whether such damages may be available under
Texas law, the parties hereby waiving their right, if any,
to recover treble, exemplary, or punitive damages in
connection with any such claims. Even though cessation of
employment under this Agreement may affect Employee's rights
under the Stock Option Grant Agreements or the Split Dollar
Agreement referenced in paragraphs 3.5 and 3.6 and/or the
Company's 1991 Stock Plan (the "1991 Stock Plan"), this
agreement to arbitrate is not applicable to disputes between
or among Company and Employee based upon or arising out of
the Stock Option Grant Agreements or the Split Dollar
Agreement referenced in paragraphs 3.5 and 3.6 the 1991
Stock Plan, or any other agreement, benefit plan, or program
heretofore or hereafter entered into between Employee and
Company, or its affiliates.
(b) Notwithstanding the agreement to arbitrate contained in
Subsection 8.15(a), in the event that either party wishes to
seek a temporary restraining order or a preliminary or
temporary injunction to maintain the status quo pending the
Arbitrator's award, each party shall have the right to
pursue such temporary injunctive relief in court. The
parties agree that such action for a temporary restraining
order or a preliminary or temporary injunction may be
brought in the State or federal courts residing in Houston,
Xxxxxx County, Texas, or in any other forum in which
jurisdiction is appropriate, and each of Company and
Employee hereby irrevocably appoints the Secretary of State
for the State of Texas as an agent for receipt of service of
process in connection with such litigation."
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 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.
XXXXXXX X. XXX ENRON CORP.
/s/ XXXXXXX X. XXX /s/ XXXXXXX X. XxXXXXXXX
Date: 2/7/00 Name: Xxxxxxx X.XxXxxxxxx
Title: Chair, Compensation &
Management Development
Committee
Date: February 7, 2000
