Exhibit 10(l)
EMPLOYMENT AGREEMENT
This Employment Agreement is entered into as of the 1st day of July,
2000, by and between TXU Energy Services Company ("Employer") and Xxxxxx X.
XxXxx, an individual ("Employee").
1. Employment. Employer hereby agrees to employ Employee and Employee
hereby agrees to serve Employer, subject to the terms and conditions
set forth herein.
2. Term. Employee's employment with Employer will commence as of the first
date set forth above and will continue through the third anniversary of
such employment commencement date (the "Term"). Following the
expiration of the Term, Employee's employment with Employer will
continue until terminated at the will of either of the parties hereto.
The parties understand and agree that, subject to the provisions of
Section 7 hereof relating to certain payments upon termination, as well
as any provisions which expressly survive termination, Employee's
employment with Employer may be terminated by either party, during or
following expiration of the Term.
3. Initial Title and Duties. Employee shall initially serve Employer as
its President and will initially have primary responsibility over the
U.S. retail business operations of the TXU System. Employee will
perform such duties and tasks as he may be called upon by Employer to
perform from time to time. Employee will endeavor to promote the
business affairs and business interests of Employer and will devote all
of his working time and attention to Employer.
4. Compensation.
(a) Base Salary. As compensation for his services hereunder,
Employee will initially receive a base salary of $37,500 per
month, payable in equal installments at such periods as shall
from time to time be established by Employer as regular
payroll periods. Employee's base salary shall be subject to
change, from time to time at the discretion of Employer
provided that, during the Term, Employee's base salary shall
not be decreased.
(b) Signing Bonus. Employee will receive, as soon as reasonably
practical following his commencement of employment hereunder,
a special one-time bonus in the amount of $30,000.
(c) Short-Term Incentive Compensation. During his employment
hereunder, Employee will be eligible to participate in
annual short-term incentive compensation plans or
arrangements of Employer as Employer may designate from time
to time. Under the TXU Energy Services Company Annual
Performance Incentive Plan, Employee shall be entitled to
short-term incentive compensation targets equal to 50% of
Employee's annualized base salary (with a payment
opportunity that can range from a minimum of 0% of
Employee's annualized base salary to a maximum of 100% of
Employee's annualized base salary) subject to the terms and
conditions of such plan. The performance goals applicable to
such awards shall be determined by Employer and communicated
to Employee. Such performance goals may be based on earnings
or other financial performance of the TXU System retail
business operations and/or on the individual performance of
the Employee during the performance period, or may be based
on such other factors as Employer may determine. For the
year 2000, Employee shall be entitled to receive a minimum
annual performance incentive payment equal to fifty percent
(50%) of Employee's annualized base salary.
(d) Long-Term Incentive Compensation. During his employment
hereunder, Employee shall be eligible to participate in
long-term incentive compensation plans or arrangements of
Employer as Employer may designate from time to time. Under
the TXU Energy Services Company Long-Term Performance
Incentive Plan, Employee shall be entitled to long-term
incentive compensation awards with a target payment equal to
50% of Employee's current annualized base salary (with a
payment opportunity that can range from a minimum of 0% of
Employee's current annualized base salary to a maximum of
100% of Employee's current annualized base salary), subject
to the terms and conditions of such plan. The performance
goals applicable to such awards shall be determined by
Employer and communicated to Employee. Such performance
goals may be based on earnings or other financial
performance of the TXU System retail business operations
and/or on the individual performance of the Employee during
the performance period, or may be based on such other
factors as Employer may determine.
(e) Restricted Stock Awards.
(i) Initial Award. Employee shall be entitled to receive an
award of 8,000 shares of performance-based restricted stock
under and subject to the terms and conditions of the TXU
Long-Term Incentive Compensation Plan ("LTICP") . Such award
shall be made as soon as reasonably practical following
Employee's commencement of employment hereunder, and shall be
subject to terms, conditions and restrictions comparable to
those contained in awards granted under the LTICP to officers
of similar status as Employee at the May 2000 meeting of the
Organization and Compensation Committee of the Board of
Directors of TXU Corp.
(ii) Future Awards. Employee shall be eligible for
consideration for future awards under the LTICP in the
discretion of the LTICP administrator based on, and subject
to, such factors as the performance of TXU Corp., Employer
and/or Employee.
(f) Other Benefits. During the period of Employee's employment
hereunder, Employee shall be entitled to participate in all
of Employer's employee benefit plans, arrangements and
fringe benefit policies to the extent he is qualified to do
so, subject to the terms, conditions and limitations of such
plans, arrangements and policies, as they may be amended,
altered or terminated from time to time. A listing of such
plans, arrangements and policies currently in effect is
attached as Exhibit "A" hereto. With respect to the
application of Employer's vacation policy, Employee shall be
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entitled to the number of vacation days provided for under
such policy as if he had attained twenty-four (24) years of
service with Employer as of the date of this Agreement.
5. Country Club. During the term of this Agreement, Employer will pay, or
reimburse Employee for the cost of, the monthly membership fees for one
(1) family membership to a country club in Dallas, Texas, and the
initiation fees and monthly membership fees for one (1) social/dinner
club in Dallas, Texas, each as may be mutually agreeable to Employer
and Employee.
6. Provision of Company Automobile. Employee will be entitled to the use
of a company-owned vehicle on substantially the same basis and terms
applicable to similarly situated officers of Employer.
7. Termination.
(a) Termination During the Term. In the event that, during the Term,
Employer terminates Employee without Cause (as defined below), in
addition to his base salary through the date of termination and
any other vested benefits and/or compensation to which Employee
is entitled under, and subject to the terms and conditions of,
employee benefit plans and programs maintained by Employer,
Employee shall be entitled to receive: (i) the amount (based on
the attainment of the target performance for each such award) of
any outstanding and unpaid long-term incentive compensation
awards that Employer had previously made to Employee pursuant to
paragraph 4(d) above, such amount being payable at the time(s)
that such award(s) would have otherwise become payable had the
termination not occurred or, at the discretion of Employer, in a
lump sum payment following the termination; and (ii) an amount
equal to the value (as of the date of termination) of all
unvested awards previously made to Employee under the LTICP
(assuming performance criteria had been met to permit payment of
100% of the award), such amount being payable at the time(s) that
such award(s) would have otherwise become payable under the LTICP
had the termination not occurred or, at the discretion of
Employer in a lump sum payment following the termination.
In the event that, during the Term, Employee resigns his
employment with Employer for any reason, or Employer terminates
Employee with Cause, Employee shall be entitled to receive his
base salary through the date of termination and any other vested
benefits and/or compensation to which Employee is entitled under,
and subject to the terms and conditions of, employee benefit
plans and programs maintained by Employer.
(b) Termination After Expiration of Term. In the event that,
following the expiration of the Term, Employer terminates
Employee without Cause, or Employee resigns his employment with
Employer for any reason, in addition to his base salary through
the date of termination and any other vested benefits and/or
compensation to which Employee may be entitled under, and subject
to the terms and conditions of employee benefit plans and
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programs maintained by Employer: (i) Employee shall be entitled
to receive the amount (based on the attainment of the target
performance for each such award), of any outstanding and unpaid
long-term incentive compensation awards that Employer had
previously made to Employee pursuant to paragraph 4(d) above,
such amount being payable at the time(s) that such awards would
have otherwise become payable had the termination not occurred
or, at the discretion of Employer, in a lump sum payment
following the termination or resignation; and (ii) if and to the
extent that an award(s) previously made to Employee under the
LTICP does not provide for the continuation of vesting and
payment following such termination or resignation, Employee shall
be entitled to receive an amount equal to the value (as of the
date of termination) of any such unvested LTICP award (assuming
performance criteria had been met to permit payment of 100% of
the award), such amount being payable at the time(s) that such
award(s) would have otherwise become payable under the LTICP had
the termination not occurred or, at the discretion of Employer in
a lump sum payment following the termination or resignation.
In the event that, following the expiration of the Term, Employee
is terminated for Cause, Employee shall be entitled to receive
his base salary through the date of termination and any other
vested benefits and/or compensation to which Employee is entitled
under, and subject to the terms and conditions of, employee
benefit plans and programs maintained by Employer.
(c) Definition of "Cause". For purposes of this Agreement, the term
"Cause" shall mean any one of the following: (1) Employee's
failure or refusal to faithfully and diligently carry out the
duties of his position with Employer; (2) Employee's breach of
his fiduciary duty to Employer in his capacity as an officer of
Employer; (3) any action or failure to act on the part of
Employee which results in injury to the assets, business
prospects or reputation of Employer or any Affiliate (as defined
in Section 9(d) below) of Employer; (4) the appropriation of a
material business opportunity of Employer or any Affiliate of
Employer, including attempting to secure or securing any personal
profit in connection with any transaction entered into on behalf
of the Employer; or (5) Employee's failure to perform his duties
and responsibilities hereunder, including without limitation
Employee's breach of Employer's Code of Conduct or an express
employment policy or rule of Employer governing employee conduct.
8. Change In Control. If, during the Term and following a Change in
Control: (a) Employee's employment is terminated by Employer (or its
successor) without Cause, or (b) Employee terminates his employment due
to a material diminution in Employee's status or responsibilities with
Employer (or its successor) as such duties and responsibilities existed
immediately prior to the Change in Control, Employee will be entitled
to receive the following payments and benefits:
(1) A one-time cash payment equal to twelve (12) times Employee's
monthly base salary (i.e., 1 year's base salary) in effect
immediately prior to the Change in Control, plus Employee's
target annual incentive bonus, if any, for the year in which
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the Change in Control occurs prorated for the number of full
months worked during such year prior to the termination or
resignation;
(2) The amount (based on the attainment of the target performance
for each such award) of any outstanding and unpaid long-term
incentive compensation awards that Employer had previously
made to Employee, such amount being payable at the time(s)
that such awards would have otherwise become payable had the
termination not occurred or, at the discretion of Employer (or
its successor), in a lump sum payment following the
termination or resignation; and
(3) If and to the extent that an award(s) previously made to
Employee under the LTICP does not provide for the continuation
of vesting and payment following such termination or
resignation, Employee shall be entitled to receive an amount
equal to the value (as of the date of termination) of all such
unvested LTICP awards (assuming performance criteria had been
met to permit payment of 100% of the award), such amount being
payable at the time(s) that such award(s) would have otherwise
become payable under the LTICP had the termination not
occurred or, at the discretion of Employer (or its successor)
in a lump sum payment following the termination or
resignation.
For purposes of this Agreement, "Change in Control" shall mean any of
the following occurrences: (i) a change in control of Employer of a
nature that would be required to be reported in response to Item 1(a)
of the Securities and Exchange Commission Form 8-K, as in effect on the
date hereof, pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934, as amended ("Exchange Act"), or would have been required
to be so reported but for the fact that such event had been "previously
reported" as that term is defined in Rule 12b-2 of Regulation 12B under
the Exchange Act; (ii) any Person is or becomes the beneficial owner
(as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of Employer representing 20% or more of the
combined voting power of Employer's then outstanding securities having
the right to vote at elections of directors ("Voting Securities") and
within two (2) years thereafter, individuals who constitute the board
of directors of Employer on the effective date of this Agreement, (the
"Incumbent Board") cease for any reason to constitute at least a
majority thereof, provided that any person becoming a director
subsequent to the effective date of this Agreement whose election, or
nomination for election by Employer's shareholders, was approved by at
least three-quarters of the directors comprising the Incumbent Board
(either by a specific vote or by approval of the proxy statement of
Employer in which such person is named as a nominee for director,
without objection to such nomination) shall be, for purposes of this
clause (ii), considered as though such person were a member of the
Incumbent Board; (iii) a recapitalization of Employer occurs which
results in either a decrease by 33% or more in the aggregate percentage
ownership of Voting Securities held by Independent Shareholders (on a
primary basis or on a fully diluted basis after giving effect to the
exercise of stock options and warrants) or an increase in the aggregate
percentage ownership of Voting Securities held by non-Independent
Shareholders (on a primary basis or on a fully diluted basis after
giving effect to the exercise of stock options and warrants) to greater
than 50%; (iv) all or substantially all of the assets of the Company
are liquidated or transferred to an unrelated party; or (v) the Company
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is a party to a merger, consolidation, reorganization or similar
transaction pursuant to which the Company or an entity controlled by
the Company is not the surviving entity. For purposes of this
definition, the term "Person" shall mean and include any individual,
corporation, partnership, group, association or other "person", as such
term is used in Section 14(d) of the Exchange Act, other than Employer,
a subsidiary of Employer or any employee benefit plan(s) sponsored or
maintained by Employer or any subsidiary thereof, and the term
"Independent Shareholder" shall mean any shareholder of Employer except
any employee(s) or director(s) of Employer or any employee benefit
plan(s) sponsored or maintained by Employer or any subsidiary thereof.
9. Confidentiality and Nondisclosure.
(a) Employee understands and agrees that he will be given
Confidential Information (as defined below) and Training (as
defined below) during his employment with Employer relating to
the business of Employer and/or its Affiliates (as defined
below). Employee hereby expressly agrees to maintain in strictest
confidence and not to use in any way (including without
limitation in any future business relationship of Employee),
publish, disclose or authorize anyone else to use, publish or
disclose in any way, any Confidential Information relating in any
manner to the business or affairs of Employer and/or its
Affiliates. Employee agrees further not to remove or retain any
figures, calculations, letters, documents, lists, papers, or
copies thereof, which embody Confidential Information of Employer
and/or its Affiliates, and to return, prior to Employee's
termination of employment, any such information in Employee's
possession. If Employee discovers, or comes into possession of,
any such information after his termination he shall promptly
return it to Employer. Employee acknowledges that the provisions
of this paragraph are consistent with Employer's Code of Conduct
with which Employee, as an employee of Employer, is bound.
(b) For purposes of this Agreement, "Confidential Information"
includes, but is not limited to, information in the possession
of, prepared by, obtained by, compiled by, or that is used by
Employer or any of its Affiliates or customers and (1) is
proprietary to, about, or created by Employer or its Affiliates
or customers; (2) gives Employer or its Affiliates or customers
some competitive business advantage, the opportunity of obtaining
such advantage, or disclosure of which might be detrimental to
the interest of Employer or its Affiliates or customers; (3) is
not typically disclosed by Employer or its Affiliates or
customers, or known by persons who are not employed by Employer
or its affiliates or Customers. Without in any way limiting the
foregoing and by way of example, Confidential Information shall
include: information not generally available to the general
public pertaining to the retail businesses of the TXU System such
as financial and operational information and data, pricing
guidelines and data analysis of retail markets and business
operations, software systems and processes, and business and
marketing strategies and plans.
(c) For purposes of this Agreement, "Training" includes, but is not
limited to, specialized and valuable training regarding business
and operational strategies and plans of Employer and its
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Affiliates, the assets and operational characteristics of the
retail businesses of the TXU System, and quantitative and
qualitative business models relating to the retail markets
business of the TXU System.
(d) For purposes of this Agreement, "Affiliate" shall mean any
person, or entity (or sub unit of an entity) that, directly or
indirectly through one or more intermediaries, controls or is
controlled by, or is under common control with Employer.
10. Non-Solicitation. Employee acknowledges and agrees that: (1) in order
to perform his obligations and job duties for Employer, Employee will
gain Training and access to Confidential Information regarding Employer
and/or its Affiliates or customers; (2) use of such Confidential
Information in competition with Employer and/or its Affiliates or
customers would be detrimental to the business interests of Employer
and/or its Affiliates or customers; and (3) Employee would not have
been allowed to gain access to Confidential Information, or to provide
the obligations and job duties contemplated under this Agreement
without his promises and agreements contained in the following
paragraph.
Accordingly, Employee agrees that during his employment with Employer,
and for a period of one (1) year thereafter, Employee shall not,
directly or indirectly, either as an employee, employer, independent
contractor, consultant, agent, principal, partner, stockholder,
officer, director, or in any other individual or representative
capacity, either for his own benefit or the benefit of any other person
or entity: (i) contact, solicit or attempt to solicit the business or
patronage of any of Employer's customers, or prospective customers, or
any person, firm, corporation, company, partnership, association or
entity which was contacted or whose business was solicited, serviced or
maintained by Employer during the term of Employee's employment with
Employer; or (ii) solicit, recruit, induce, encourage or in any way
cause any employee of Employer to terminate his/her employment with
Employer.
11. Injunctive Relief. Because of the unique nature of the business to be
conducted by Employer or its affiliates and the Confidential
Information relating thereto, Employee acknowledges, understands and
agrees that Employer and/or its affiliates will suffer immediate and
irreparable harm if Employee fails to comply with any of this
obligations under Sections 9 and 10 of this Agreement, and that
monetary damages alone will be inadequate to compensate Employer or
its affiliates for such breach. Accordingly, Employee agrees that
Employer and/or its affiliates shall, in addition to any other
remedies available to it at law or in equity, be entitled to
temporary, preliminary, and permanent injunctive relief and specific
performance to enforce the terms of Sections 9 and 10 without the
necessity of proving inadequacy of legal remedies or irreparable harm
or posting bond.
12. Deductions and Nonalienation of Benefits. Employee shall be required
to pay promptly on demand, by payroll deduction or otherwise, the
amount required to be withheld by Employer for income and employment
taxes in respect of amounts paid under this Agreement. No right,
benefit or payment hereunder shall be subject to anticipation,
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alienation, sale, assignment, pledge, encumbrance or charge, and any
attempt to anticipate, alienate, sell, assign, pledge, encumber or
charge the same shall be null and void. No right, benefit or payment
hereunder shall in any manner be subject to, voluntarily or
involuntarily, the debts, contracts, liabilities or torts of Employee
or be otherwise subject to any execution, garnishment, attachment,
insolvency, bankruptcy or legal proceedings of any character or legal
sequestration, levy or sale. If Employee or any other beneficiary
hereunder shall become bankrupt or attempt to anticipate, alienate,
sell, assign, pledge, encumber or charge any right, benefit or payment
hereunder, such right, benefit or payment may be terminated at any
time by Employer without liability or further obligation.
13. Entire Agreement. This Agreement contains the complete understanding
and agreement between the parties and supersedes any and all other
agreements, understandings, or communications of any kind, either oral
or in writing, between the parties hereto with respect to the subject
matter hereof. Each party to this Agreement acknowledges that no
representations, inducements, promises, or agreements, oral or in
writing, have been made by any party, or anyone acting on behalf of
any party, which are not embodied herein, and that no other agreement,
statement, or promise with respect to the subject matter of this
Agreement shall be valid or binding. Nothing in this Agreement shall
be construed as conferring any right upon Employee to continued
employment by Employer. Any modification of this Agreement will be
effective only if it is in writing signed by both of the parties
hereto.
14. Severability. If any term, provision, covenant, or restriction of this
Agreement is held by a board of arbitration or a court of competent
jurisdiction to be invalid, void or unenforceable as written, the
remainder of this Agreement and the other terms, provisions, covenants
and restrictions hereof shall remain in full force and effect and
shall in no way be affected, impaired or invalidated. It is hereby
stipulated and declared to be the intention of the parties that they
would have executed this Agreement had the terms, provisions,
covenants and restrictions which may be hereafter declared invalid,
void, or unenforceable not initially been included herein. If a court
of competent jurisdiction determines that any restriction or portion
thereof, set forth in Sections 9 or 10 is overly restrictive and
unenforceable, the court may reduce or modify such restriction to
those that it deems reasonable and enforceable under the
circumstances, and the parties agree to request the court to exercise
such power, and, as so reduced or modified, the parties hereto agree
that the restriction of Sections 9 or 10 shall remain in full force
and effect, shall be enforceable and shall be enforced.
15. Survival. The parties hereby acknowledge and agree that the agreements
contained in Sections 9, 10 and 11 are continuing in nature and shall
survive Employee's termination of employment, regardless of the reason
for such termination. Employer acknowledges and agrees that the
covenants and restrictions in this Agreement are reasonable and
necessary due to the highly competitive, confidential and proprietary
nature of the services to be performed by Employee hereunder.
16. Successors. This Agreement shall be binding upon and inure to the
benefit of Employee, his heirs, beneficiaries and personal
representatives, and Employer and any successor of Employer, but
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neither this Agreement, nor any of the rights or obligations of either
party hereunder may be assigned, in whole or in part, except Employer
may assign this Agreement to any affiliate of Employer.
17. Notices. Any notices to be given hereunder by either party to the other
may be effected by personal delivery in writing, by facsimile or by
mail, registered or certified, postage prepaid to the last known
address of the other party with return receipt requested. Notices
delivered personally or by facsimile shall be deemed communicated as of
actual receipt; mailed notices shall be deemed communicated as of the
third day after mailing in the manner described above.
18. Governing Law. This Agreement has been made, delivered, and is to be
performed, in full or in part, in Dallas County, Texas. This Agreement
shall be governed by, construed and enforced in accordance with the
laws of the State of Texas.
EXECUTED in Dallas, Texas effective as of the day and year first above written.
EMPLOYER:
TXU ENERGY SERVICES COMPANY
By: s/s Xxxxx X. Xxxxxx
-----------------------------------------
Xxxxx X. Xxxxxx
EMPLOYEE:
s/s Xxxxxx X. XxXxx
--------------------------------------------
Xxxxxx X. XxXxx
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EXHIBIT "A"
1. Retirement Plan for Employees of the Texas Utilities Company System
(Cash Balance Formula)
2. Supplemental Retirement Plan for Employees of the Texas Utilities
Company System
3. Employees' Thrift Plan of the Texas Utilities Company System
4. Deferred Compensation Plan for Emerging Business Units of the Texas
Utilities Company System
5. TXU Energy Services Company Annual Performance Incentive Plan (Formerly
the Texas Utilities Integrated Solutions Inc. Annual Performance
Incentive Plan)
6. TXU Energy Services Company Long-Term Performance Incentive Plan
(Formerly the Texas Utilities Integrated Solutions Inc. Long-Term
Performance Incentive Plan)
7. Group Medical Plan
8. Group Dental Plan
9. Group Life Insurance Plan
10. Long-Term Disability Income Plan
11. Relocation Reimbursement Plan
12. Holiday and Vacation Pay
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