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EXHIBIT 10.42
EXECUTIVE EMPLOYMENT AGREEMENT BETWEEN
COGENTRIX ENERGY, INC., AND XXXXX X. XXXXXX
THIS AGREEMENT is effective as of the 1st day of January 1999, between
Cogentrix Energy, Inc., a North Carolina corporation (the "Corporation"), and
Xxxxx X. Xxxxxx (the "Executive").
In consideration of the mutual covenants and obligations set forth
herein, the parties agree as follows:
1. EMPLOYMENT AND DUTIES.
a. The Corporation desires to employ Executive as Group Senior Vice
President and Chief Financial Officer;
b. As Group Senior Vice President and Chief Financial Officer,
Executive shall perform such duties and services, consistent with his position,
as may be assigned to him.
2. TERM OF AGREEMENT.
a. Subject to the conditions set forth within, this Agreement shall be
effective January 1, 1999, and its terms will commence on such date. The
Agreement shall renew automatically at the end of each calendar year unless
Executive is involuntarily terminated pursuant to paragraph 4.
3. COMPENSATION; ENTITLEMENTS.
a. Commencing January 1, 1999, the Corporation shall pay to Executive
an annual base salary (the "Base Salary") of Three Hundred and Six Thousand
Dollars ($306,000) payable in equal monthly installments of $25,500 per month.
Such compensation may be increased during 1999 or in subsequent years.
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b. Executive will participate in Corporation's Profit Sharing Plan
equal to no less than 0.5% of Net Income Before Income Taxes, as defined in the
Profit Sharing Plan Agreement between Executive and Corporation, and in
addition, is entitled to participate in the provisions as outlined in the
Management Incentive Bonus Plan.
c. Executive is eligible for and entitled to participate in any future
equity or quasi-equity programs offered by Corporation at a level commensurate
with other Group Senior Vice Presidents.
4. INVOLUNTARY TERMINATION; SEVERANCE BENEFITS.
a. The Corporation may involuntarily terminate Executive's employment
under this Agreement at any time upon thirty (30) days written notice subject to
the terms and conditions specified herein and under the Profit Sharing Plan
Agreement between Executive and Corporation regarding compensation and benefits
due and owing to Executive upon termination. In the event Executive is
involuntarily terminated at any time in 1999 or in any subsequent year,
Executive shall receive a severance payment under this Agreement equal to 250%
of his total compensation earned in the prior calendar year (including salary,
bonuses and profit sharing) to be paid within thirty (30) days of the date of
termination.
5. CHANGE OF CONTROL. For the purpose of this Agreement, a "Change of
Control" shall be deemed to have taken place if: (i) a person, corporation,
entity or group acquires, directly or indirectly, the beneficial ownership of
50% or more of the issued and outstanding stock of the Corporation in a single
transaction or series of transactions, (ii) the Corporation is a party to a
merger,
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consolidation or similar transaction and following such transaction 50% or more
of the issued and outstanding securities of said party is beneficially owned by
a person, corporation, entity or group other than the Corporation or an entity
directly or indirectly controlled, controlling or under common control with the
Corporation (an "Affiliate of the Corporation"), (iii) the Corporation sells or
transfers 50% or more of its assets to any other person or persons other than an
Affiliate of the Corporation, (iv) the shareholders of the Corporation approve a
plan or proposal for the liquidation or dissolution of the Corporation or (v)
during any two-year period, individuals who comprise a majority of the Board at
the beginning of such two-year period do not comprise a majority of the Board at
the end of such two-year period (such Board composition being referred to as a
"Continuing Majority"). Notwithstanding the foregoing, the absence of a
Continuing Majority shall not constitute a Change of Control if such absence is
in contemplation of an initial public offering or a private placement of the
capital stock or other securities of the Corporation.
a. In the event of a "Change in Control", Executive shall be deemed to
have been involuntarily terminated if any of the following occurs: (i) any
alteration in Executive's title, duties, authority, location of workplace and
responsibilities from those in effect immediately prior to a change in control
of the Corporation or the assignment to Executive of any duties inconsistent
with his status as a management employee, (ii) a reduction in Executive's annual
base salary or profit sharing participation as in effect immediately prior to a
change in control of the Corporation, (iii)
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the failure by the Corporation to make any other payment to Executive of
compensation, including bonuses or benefit payments.
b. If any of the triggering events described above occur, Executive
shall be entitled to the amount of severance payments described in paragraph 4
together with cash payments in an amount sufficient to ensure that the amounts
received in accordance with this Section 5 as a result of a Change in Control
are not subject to net reductions due to the imposition of excise taxes under
Section 4999 of the Internal Revenue Code of 1986, as amended.
6. ENFORCEMENT. It is the desire and intent of the parties hereto that
the provisions of this Agreement shall be enforced to the fullest extent
permissible under the laws and public policies applied in each jurisdiction in
which enforcement is sought.
7. NOTICES. All notices and other communications which are required or
permitted hereunder shall be in writing and shall be delivered personally or
sent by air courier or first class certified or registered mail, postage
prepaid, return receipt requested. All notices and other communications given to
any party hereto in accordance with the provisions of this Agreement shall be
deemed to have been given on the date of delivery if personally delivered; on
the business day after the date when sent if sent by air courier; and on the
third business day after the date when sent if sent by mail, in each case
addressed to such party as provided in this Section or in accordance with the
latest unrevoked direction from such party.
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8. PRIOR AGREEMENTS/ORAL MODIFICATIONS/AMENDMENTS. This Agreement
supersedes all prior agreements and constitutes the entire Agreement and
understanding between Executive and Corporation. It may not be amended, modified
in any manner or terminated orally; and no amendment, modification, termination
or attempted waiver of any of the provisions hereof shall be binding unless in
writing and signed by the party against whom the same is sought to be enforced;
provided, however, that the Executive's compensation or benefits may be
increased at any time by the Corporation without in any way affecting any of the
other terms and conditions of this Agreement which in all other respects shall
remain in full force and effect.
9. ATTORNEY'S FEES. In the event of any litigation between the parties
to this Agreement, or any of them, concerning this Agreement, the prevailing
party shall be entitled to recover its reasonable attorney's fees.
10. BINDING AGREEMENT; BENEFIT. The provisions of this Agreement will
be binding upon, and will inure to the benefit of, the respective heirs, legal
representatives and successors of the parties hereto.
11. GOVERNING LAW. This Agreement will be governed by, and construed
and enforced in accordance with the laws of North Carolina.
12. WAIVER OF BREACH. The waiver by either party of a breach of any
provision of this Agreement by the other party must be in writing and shall not
operate or be construed as a waiver of any subsequent breach by such other
party.
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13. HEADINGS. The section headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
14. SEVERABILITY. Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
15. SUCCESSORS; BINDING AGREEMENT. This Agreement shall be binding upon
and inure to the benefit of the Corporation and its successors and assigns
(whether direct or indirect, by purchase, merger, consolidation or otherwise)
and Executive and his heirs. In the event that Executive shall die after
becoming entitled to payment of the benefits, hereunder, such payment shall be
made by the Corporation to Executive's beneficiary designated by him for
purposes of the group life insurance plan of the Corporation in which Executive
shall participate or, if there is no such designated beneficiary, to Executive's
estate.
16. ASSIGNMENT. This Agreement is personal in its nature and the
parties hereto shall not, without the consent of the other, assign or transfer
this Agreement or any rights or obligations hereunder; provided, however, that
the provisions hereof shall inure to the benefit of, and be binding upon each
successor of the
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Corporation whether by merger, consolidation, transfer of all or substantially
all assets, or otherwise.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the date first above written.
EXECUTIVE FOR CORPORATION
XXXXX X. XXXXXX COGENTRIX ENERGY, INC.
By: /s/ Xxxxx X. Xxxxxx By: /s/ Xxxxx X. Xxxxx
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Date: 1/22/99 Date: Jan. 22, 1999
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WITNESS: WITNESS:
/s/ Xxxx X. Xxxxxx /s/ Xxxx X. Xxxxx
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Date: 1-22-99 Date: Jan 22, 1999
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