1
EXHIBIT 10.11
January 11, 2000
Xx. Xxxx X. Xxxxxx
6540 Rutgers
Xxxxxxx, Xxxxx 00000
Dear Xxxx:
Set forth below are the terms of your employment (the "Agreement") with
Dynegy Inc. (hereinafter referred to as "Dynegy" or the "Company").
1. TITLE AND DUTIES
Your title shall be Executive Vice President. You will be
responsible for the duties typical to such position and shall have such other
duties as may be delegated from time to time by your immediate supervisor. You
will be employed at Dynegy's headquarters in Houston, Texas. You shall devote
your full time, energy and skill to the performance of your duties for Dynegy,
and will exercise due diligence and reasonable care in the performance of such
duties. During the Term (as defined below) of this Agreement, you shall report
to the Company's Chief Executive Officer and be a member of the Company's
Corporate Strategy and Policy Committee. The Company will take such action as
may be required to facilitate your election as a non-voting Advisory Director of
Dynegy. In addition, you will be permitted to participate in such other
business, professional or charitable affiliations with the prior written
approval of the Company's Chief Executive Officer.
2. TERM
(a) Unless earlier terminated as provided for herein, the term of
this Agreement will be for four (4) years, commencing on the Effective Date (as
defined below) and ending on the fourth anniversary of the Effective Date (such
period, as extended pursuant to the next succeeding sentence, if applicable, the
"Term"). The Term shall automatically be extended for additional one (1) year
periods unless either the Company or you provides written notice at least sixty
(60) days prior to the date on which this Agreement would otherwise be
automatically extended that such party is electing not to so extend the Term.
The term "Effective Date" means
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the date of the closing of the proposed merger of Dynegy Inc. and Illinova
Corporation pursuant to that certain merger agreement dated as of June 14, 1999,
as amended.
(b) If your employment with Dynegy is terminated due to your
voluntary resignation or by the Company for "cause", this Agreement shall
terminate immediately (except for the confidentiality, non-competition and
non-solicitation provisions of Paragraph 4 and the provisions of Paragraphs 5
and 6), and the Company shall have no further obligation to you except for the
payment of amounts due before the date of such termination and except that you
will be fully vested with regard to all stock options (irrespective of the date
of the grant of such options and irrespective of the vesting schedule otherwise
applicable to such options) granted to you hereunder as a signing bonus, as
provided in Paragraph 3(d) below, and you shall be permitted to retain such
options for future exercise or sell such stock received on exercise as though
you had remained in the employment of the Company until the end of the Term. The
Company shall take such actions as permitted by applicable law to cause such
vesting and option retention. However, nothing in this Paragraph 2(b) shall
require accelerated vesting or accelerated exercisability of any other stock
options that may have been or may be granted to you unless otherwise expressly
provided for herein. You further agree that the benefits which you have received
from the execution of this Agreement through the date of such termination
constitute sufficient consideration for your obligations pursuant to Paragraph
4, notwithstanding the fact that the Company has no further obligation to you
except for the payment of amounts due before the date of such termination and
except for you being fully vested with regard to all stock options (irrespective
of the date of the grant of such options and irrespective of the vesting
schedule otherwise applicable to such options) granted to you hereunder as a
signing bonus, as provided in Paragraph 3(d) below, and you shall be permitted
to retain such options for future exercise or sell such stock received on
exercise as though you had remained in the employment of the Company until the
end of the Term, and the Company shall take such actions as permitted by
applicable law to cause such vesting and option retention. For purposes of this
Agreement, you may be terminated for "cause" as a result of (i) your refusal to
implement or adhere to lawful policies or lawful directives of the Board of
Directors of Dynegy (the "Board of Directors") or your immediate supervisor;
(ii) serious misconduct, dishonesty or disloyalty, directly related to the
performance of your duties for the Company or gross negligence in the
performance of your duties for the Company; (iii) your being convicted (or
entering into a plea bargain admitting or not contesting criminal guilt) in any
criminal felony proceeding; (iv) drug or alcohol abuse; (v) continued failure to
perform your duties under this Agreement, which is not cured within ten (10)
days after written notice of such failure is provided to you by Dynegy; or (vi)
any other material breach of this Agreement by you that is not cured within ten
(10) days after written notice of such breach is delivered to you from the
Company.
(c) If your employment is terminated during the Term of this
Agreement due to resignation following "constructive termination" (as defined
below) or for any other reason other than your voluntary resignation, death,
disability or discharge for cause, you shall receive as your sole compensation
in lieu of further payments to you pursuant to Paragraph 3 hereof: (i) a lump
sum amount equal to the product of (x) 2.99 and (y) the greater of (a) the
average annual Base Salary and incentive compensation, whether payable in cash
or stock options, you were paid by the Company for the highest three (3)
calendar years preceding the calendar year in which your
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employment is terminated (or such shorter period as you have actually been
employed by the Company), or (b) your Base Salary and target bonus amount for
the year in which your employment is terminated; (ii) a lump sum amount equal to
the net present value, as determined by the Board of Directors in its sole and
absolute discretion, of the benefits to be provided to you in Paragraphs 3(f)
and 3(g) of this Agreement and such other perquisites (if any) being provided to
you on the date of your termination, as if you were still employed for the
remainder of the Term of this Agreement, with regard to those benefits to be
provided to you during the Term of this Agreement, and as if you had completed
the Term of this Agreement with regard to those benefits to be provided to you
upon completion of the Term of this Agreement; (iii) any employee stock options
granted to you prior to or during the Term of this Agreement shall become vested
as of the date of your resignation due to such constructive termination or
discharge not for cause, and you shall have the right to exercise any such
vested options through the end of the Term of this Agreement or one year from
the date of termination, whichever is later; and (iv) for a period of thirty-six
(36) months from the date of such termination, all health and welfare benefits
the Company was maintaining for you and your family as of the date of such
resignation or discharge.
For purposes of this Agreement a "constructive termination" shall
be deemed to have occurred in the event that: (i) your Base Salary as defined in
Paragraph 3(a), bonus compensation under Paragraph 3(b), target range of annual
option grants under Paragraph 3(c) or other compensation as described in
Paragraphs 3(f) and 3(g) is reduced; (ii) a significant diminution in your
responsibilities, authority or scope of duties is effected by the Board of
Directors, and such diminution is made without your written consent (without
regard to whether or not any change is made to your title); (iii) the Company
materially breaches this Agreement; or (iv) the relocation of the Company's
principal executive offices to a location, or the Company requires you to be
based, outside a fifty (50) mile radius from the city limits of Houston, Texas.
Any resignation by you as a result of assertion of a constructive termination
shall be communicated by delivery to the Board of Directors within thirty (30)
days from the commencement of such constructive termination by written notice
setting forth the grounds therefor, during which period the Company shall be
entitled to cure or remedy the matters set forth in such notice to your
reasonable satisfaction. Unless you withdraw such notice prior to the expiration
of such thirty-day (30) period, such resignation shall take effect upon the
expiration of thirty (30) days from the date of the delivery of such notice. Any
other resignation by you shall be communicated by thirty (30) days' advance
written notice.
(d) If you die, or become disabled and cannot perform your duties,
your employment hereunder shall be terminated immediately (except that the
confidentiality, noncompetition and nonsolicitation provisions of Paragraph 4
and the provisions of Paragraphs 5 and 6 shall survive the termination of your
employment) and: (i) you (or your estate) shall be entitled to the Base Salary
(as defined in Paragraph 3(a)) payable to you hereunder for twelve (12) months
following the month in which you die or become disabled, plus the amount of any
target bonus as described in Paragraph 3(b) for the year of death or disability,
prorated for the portion of the twelve-month period (12) elapsed in which the
death or disability occurs; (ii) you (or your estate) shall receive, for a
period of twenty-four (24) months from the date of your death or disability, all
health insurance and health benefits that the Company was maintaining for you
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and/or your estate and for your family as of the date of your death or
disability; and (iii) any employee stock options granted to you during the Term
of this Agreement shall become vested as of the date of your death or disability
on the same terms as provided for the vesting of stock options in Paragraph 2(c)
above. For purposes of this Agreement, you shall be disabled as of the first
date on which you become eligible to receive disability benefits under the
Company's long-term disability plan (or Social Security disability benefits at a
time when the Company does not maintain a long-term disability plan or such plan
is not available to you).
(e) Unless otherwise specified herein, all payments under this
Agreement shall be paid in a lump sum, less applicable withholding taxes, within
thirty (30) days following the date of your termination.
3. COMPENSATION
(a) Each year during the Term hereof, you will be paid a base
salary of $450,000 per annum ("Base Salary"), payable in accordance with the
Company's payroll guidelines. Increases may be made to your Base Salary at the
discretion of the Board of Directors based upon your individual performance.
(b) You shall be a participant in the Company's Incentive
Compensation Plan. As part of Dynegy's incentive compensation program, you will
have the opportunity to earn a target bonus in an amount equal to 100% of your
Base Salary and a maximum cash award in an amount equal to 200% of your Base
Salary, dependent upon certain financial or performance objectives, determined
in accordance with such program and by the Board of Directors. To the extent any
incentive compensation in excess of the maximum cash amount referenced above is
payable under the Incentive Compensation Plan in any year to you, the Company
will pay you any such amounts in noncash equivalents (e.g., stock options or
restricted securities of the Company) of equal value, as determined by the Board
of Directors in its sole and absolute discretion, At your election, in lieu of
paying you all or part of such incentive compensation bonus, the Company will
allow you to direct that all or part of such incentive compensation shall be
allocated by the Company to, or expended directly for, charitable contributions
of your selection.
(c) Upon the Effective Date, you shall receive an initial grant of
stock options pursuant to the Company's Long Term Incentive Plan (the "LTIP")
with a projected value equal to 270% of your Base Salary. These options are
subject to the vesting, forfeiture and other terms and conditions of the LTIP.
Each year during the Term of this Agreement, you will be eligible to receive
stock option grants granted to an employee holding the position of "Executive
Vice President" in accordance with the requirements and provisions of the LTIP.
The current target range for annual option grants for your position is a median
of 180% and a 75th percentile of 270% of your Base Salary. You recognize that
any value of an award of "market" options under the LTIP is a projected value,
which is subject to the future performance of the Company stock, and that there
is no guarantee that the actual value of such options will achieve that value.
"Projected Value" means that at the end of the five years from the date of
grant, assuming an
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increase in market price of 15% per annum during the five years, the stock
option may be exercised to obtain the stated value in excess of the exercise
price.
(d) Upon the Effective Date, you will receive, as a signing bonus,
(x) a cash payment in the amount of $500,000 and (y) a grant of discounted stock
options under Dynegy's Market and Employee Equity Option Plan ("EEOP") with an
immediate in-the-money value equal to $750,000, with one-third (1/3) of these
options vesting on each of the first, second and third anniversary of the
Effective Date. These options shall be subject to the forfeiture and other terms
and conditions of the EEOP, except as provided in clause (b) of Paragraph 2
hereunder. You and the Company acknowledge and agree that: (i) as of the
Effective Date, that certain Employment Agreement (as the same may have been
amended, supplemented or modified from time to time, the "Employment
Agreement"), dated as of April 8, 1997, between you and NGC Corporation, is
hereby terminated and of no further force and effect and (ii) the payments
granted to you pursuant to clauses (x) and (y) of this Paragraph 3(d) are in
full satisfaction of all of the Company's remaining duties and obligations under
the Employment Agreement.
(e) Upon the Effective Date, any options granted to you prior to
November 1, 1999 shall become vested.
(f) You will be entitled to participate in Dynegy's benefits
programs for senior management executives, including, without limitation,
Dynegy's deferred compensation plan for executives. Without limiting the
foregoing, you will be entitled to participate in such other plans and receive
such other perquisites as the Board of Directors in its sole discretion
determines, including, but not limited to, reserved parking, club memberships,
use of aircraft owned or leased by the Company, annual physical examination,
financial and/or federal income tax planning and tax return preparation, the
allocable cost of which plans and perquisites to you are not to exceed $25,000
annually. Pursuant to the terms of Dynegy's vacation policy you will be entitled
to four (4) weeks per year of paid vacation.
(g) The Company will pay an additional $5,000 per year on your
behalf to provide you with additional life insurance and disability coverage in
excess of the death benefit or disability coverage under Dynegy's standard
executive employee and benefit plans. You shall select such coverage and shall
own the insurance policies providing such coverage. You will be responsible for
coverage and effectiveness of the policies, the Company's only obligation being
to pay such amounts.
4. CONFIDENTIALITY
You recognize and acknowledge that:
(a) You will have access to certain information concerning the
Company that is confidential and proprietary and constitutes valuable and unique
property of the Company. You agree that you will not at any time, either during
or after your employment, disclose to others, use, copy or permit to be copied,
except pursuant to your duties on behalf of the
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Company or its successors, assigns or nominees, any secret or confidential
information of the Company (whether or not developed by you) without the prior
written consent of the Board of Directors. The term "secret or confidential
information of the Company" (sometimes referred to herein as "Confidential
Information") shall include, without limitation, the Company's plans,
strategies, potential acquisitions, costs, prices, systems for buying, selling,
and/or trading natural gas, natural gas liquids, crude oil, coal, and
electricity, client lists, pricing policies, financial information, the names of
and pertinent information regarding suppliers, computer programs, policy or
procedure manuals, training and recruiting procedures, accounting procedures,
the status and content of the Company's contracts with its suppliers or clients,
or servicing methods and techniques at any time used, developed, or investigated
by the Company, before or during your tenure of employment to the extent any of
the foregoing are (i) not generally available to the public and (ii) maintained
as confidential by the Company. You further agree to maintain in confidence any
confidential information of third parties received as a result of your
employment and duties with the Company.
(b) At the termination of your employment, you will deliver to the
Company, as determined appropriate by the Company, all correspondence,
memoranda, notes, records, client lists, computer systems, programs, or other
documents and all copies thereof made, composed or received by you, solely or
jointly with others, and which are in your possession, custody or control at
such date and which are related in any manner to the past, present or
anticipated business of the Company.
(c) To protect and safeguard the Company's trade secrets and
Confidential Information and also the Company's goodwill with its suppliers and
clients, for that period of time following the termination of your employment
for any reason other than pursuant to Paragraph 2(c) (i.e., in the event of a
termination pursuant to the first paragraph of Paragraph 2(c), the non-compete
obligations of this Paragraph 4(c) shall terminate) hereof through the
expiration of the Term or twenty-four (24) months from the date of termination,
whichever is later, you will not, within a 50 mile radius of any location where
the Company had an office at any time during the Term hereof or any location
where a client or supplier of the Company (which is a material client or
supplier at any time during the Term hereof) had an office at any time during
the Term hereof, without the prior written consent of the Board of Directors,
directly or indirectly, engage in or be interested in (as owner, partner,
shareholder, employee, director, agent, consultant or otherwise), any business
which is a competitor of the Company, as hereinafter defined. For purposes of
this Agreement, a "competitor of the Company" is any entity, including, without
limitation, a corporation, sole proprietorship, partnership, joint venture,
syndicate, trust or any other form of organization or a parent, subsidiary or
division of any of the foregoing, which, during such period or the immediately
preceding fiscal year of such entity, was engaged in the unregulated marketing,
gathering, transportation or processing of natural gas or derivatives of natural
gas or other hydrocarbons or electricity. For purposes of this paragraph, the
following entities shall not be deemed to be competitors of the Company: (i) a
Local Distribution Company ("LDC") to the extent that any purchases or sales by
such LDC are only for consumption on its system; (ii) a natural gas producer to
the extent that such producer sells only its own production or production of
other working interest owners in xxxxx in which it owns an interest; (iii) a
natural gas pipeline company in the jurisdictional aspects of its business,
i.e.,
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other than a nonjurisdictional marketing affiliate or production affiliate
(except as to such production affiliate's own production as described in clause
(ii) of this Paragraph 4(c)); or (iv) an integrated regulated electric and/or
gas utility as long as such utility does not engage in the unregulated marketing
of its generation or power trading other than that related to the generation or
power marketing allocated to its own service areas. The terms of this Paragraph
4(c) shall not apply to your present or future investments in the securities of
companies listed on a national securities exchange or traded on the
over-the-counter market to the extent such investments do not exceed one percent
(1%) of the total outstanding shares of such company.
(d) For a period of twenty-four (24) months after the expiration
or termination of your employment for whatever reason, other than pursuant to
Paragraph 2(c) above or for a period of twelve months following the termination
of your employment pursuant to Paragraph 2(c) above, you shall not solicit,
raid, entice, encourage or induce any person who at the time of such expiration
or termination of employment is an employee of the Company, or any of its
subsidiaries or affiliated companies, to become employed by any person, firm or
corporation, and you shall not approach any such employee for such purpose or
authorize or knowingly approve the taking of such actions by any other person,
firm or corporation or assist any such person, firm or corporation in taking
such action.
(e) You agree that the foregoing restrictions contain reasonable
limitations as to the time, geographical area, and scope of activity to be
restrained and that these restrictions do not impose any greater restraint than
is necessary to protect the goodwill and other legitimate business interests of
the Company, including, but not limited to, the protection of Confidential
Information. You also agree that the general public shall not be harmed by
enforcement of this Paragraph 4. Should any provision in this Paragraph 4 be
held unreasonably broad with respect to the restrictions as to time,
geographical area or scope of activity to be restrained, any such restriction
shall be construed by limiting and reducing it to the extent necessary to render
it reasonable, and as so construed, such provision shall be enforced.
Accordingly, you consent and agree that if you violate any of the
provisions of this Paragraph 4, the Company and its subsidiaries and affiliated
companies would sustain irreparable harm and, therefore, in addition to any
other remedies which the Company may have under this Agreement or otherwise, the
Company shall be entitled to an injunction from any court of competent
jurisdiction restraining you from committing or continuing any such violation of
this Paragraph 4. You acknowledge that damages at law would not be an adequate
remedy for violation of this Paragraph 4, and you therefore agree that the
provisions of this Paragraph 4 may be specifically enforced against you in any
court of competent jurisdiction. Nothing herein shall be construed as
prohibiting the Company from pursuing any other remedies available to the
Company for such breach or threatened breach, including the recovery of damages
from you.
5. INDEMNIFICATION
If, at any time during or after the Term of this Agreement, you
are made a party to, or are threatened to be made a party in, any civil,
criminal or administrative action, suit or proceeding by reason of the fact that
you are or were a director, officer, employee or agent of the
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Company, or of any other corporation or any partnership, joint venture, trust or
other enterprise for which you served as such at the request of the Company,
then you shall be indemnified by the Company, to the fullest extent permitted
under applicable law, against expenses actually and reasonably incurred by you
or imposed on you in connection with, or resulting from, the defense of such
action, suit or proceeding, or in connection with, or resulting from, any appeal
therein if you acted in good faith and in a manner you reasonably believed to be
in or not opposed to the best interest of the Company, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe your conduct
was unlawful, except with respect to matters as to which it is adjudged that you
are liable to the Company or to such other corporation, partnership, joint
venture, trust or other enterprise for gross negligence or willful misconduct in
the performance of your duties. As used herein, the term "expenses" shall
include all obligations actually and reasonably incurred by you for the payment
of money, including, without limitation, attorney's fees, judgments, awards,
fines, penalties and amounts paid in satisfaction of a judgment or in settlement
of any such action, suit or proceeding, except amounts paid to the Company or
such other corporation, partnership, joint venture, trust or other enterprise by
you. The foregoing indemnification provisions shall be in addition to any other
rights to indemnification to which you may be entitled.
6. ARBITRATION
The parties hereto may attempt to resolve any dispute hereunder
informally via mediation or other means. Otherwise, any controversy or claim
arising out of or relating to this Agreement, or any breach thereof, shall,
except as provided in Paragraph 4, be adjudged only by arbitration in accordance
with the rules of the American Arbitration Association, and judgment upon such
award rendered by the arbitrator may be entered in any court having jurisdiction
thereof. The arbitration shall be held in the city of Houston, Texas, or such
other place as may be agreed upon at the time by the parties to the arbitration.
The arbitrator(s) shall, in their award, allocate between the parties the costs
of arbitration, which shall include reasonable attorneys' fees of the parties,
as well as the arbitrators' fees and expenses, in such proportions as the
arbitrator(s) deem just; provided, however, notwithstanding the above, in the
event you are the prevailing party, then the Company agrees to reimburse you for
all such costs of arbitration, including, but not limited to, attorneys' fees
and expenses reasonably incurred by you; provided further, notwithstanding the
above, in the event the Company is the prevailing party, then the total costs of
arbitration, including but not limited to attorneys' fees reasonably incurred by
the Company and arbitrators' fees and expenses, that may be allocated to you by
the arbitrator(s) shall not in any event exceed Twenty-Five Thousand Dollars
($25,000). Notwithstanding the foregoing, you shall be entitled to seek specific
performance in a court of competent jurisdiction of your right to be paid your
full compensation until your separation from employment, during the pendency or
dispute of any controversy arising under or in connection with this Agreement.
7. EXCISE TAXES
(a) In the event that any payment or benefit received or to be
received by you pursuant to the terms of this Agreement in connection with and
contingent on the termination of your employment with the Company (the "Contract
Payments") or of any other plan,
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arrangement or agreement of the Company (or any affiliate) ("Other Payments"
and, together with the Contract Payments, the "Payments") would be subject to
the excise tax (the "Excise Tax") imposed by Section 4999 of the Internal
Revenue Code of 1986 (as amended from time to time, the "Code") as determined as
provided below, the Company shall pay to you, at the time specified in Section
7(b) below, an additional amount (the "Gross-Up Payment") such that the net
amount retained by you, after deduction of the Excise Tax on Payments and any
federal, state and local income tax and the Excise Tax upon the Gross-Up
Payment, and any interest, penalties or additions to tax payable by you with
respect thereto, shall be equal to the total present value (using the applicable
federal rate (as defined in Section 1274(d) of the Code in such calculation) of
the Payments at the time such Payments are to be made. The Company shall have
the right to make any such Gross-Up Payment, in whole or in part, in the form of
a noncash payment of equal value (as determined by Independent Counsel) to that
portion of the Gross-Up Payment had it been paid in cash, For purposes of
determining whether any of the Payments will be subject to the Excise Tax and
the amounts of such Excise Tax, (1) the total amount of the Payments shall be
treated as "parachute payments" within the meaning of section 280G(b)(2) of the
Code, and all "excess parachute payments" within the meaning of section
280G(b)(1) of the Code shall be treated as subject to the Excise Tax, except to
the extent that, in the opinion of independent counsel selected by the Company
and reasonably acceptable to you ("Independent Counsel"), a Payment (in whole or
in part) does not constitute a "parachute payment" within the meaning of section
280G(b)(2) of the Code, or such "excess parachute payments" (in whole or in
part) are not subject to the Excise Tax, (2) the amount of the Payments that
shall be treated as subject to the Excise Tax shall be equal to the lesser of
(A) the total amount of the Payments or (B) the amount of "excess parachute
payments" within the meaning of section 280G(b)(1) of the Code (after applying
clause (1) hereof), and (3) the value of any noncash benefits or any deferred
payment or benefit included in the Payments or Gross-Up Payment, as applicable,
shall be determined by Independent Counsel in accordance with the principles of
sections 280G(d)(3) and (4) of the Code. For purposes of determining the amount
of the Gross-Up Payment, you shall be deemed to pay federal income taxes at the
highest marginal rates of federal income taxation applicable to the individuals
in the calendar year in which the Gross-Up Payment is to be made and state and
local income taxes at the highest marginal rates of taxation applicable to
individuals as are in effect in the state and locality of your residence in the
calendar year in which the Gross-Up Payment is to be made, net of the maximum
reduction in federal income taxes that can be obtained from deduction of such
state and local taxes, taking into account any limitations applicable to
individuals subject to federal income tax at the highest marginal rates.
(b) The Gross-Up Payments provided for in Paragraph 7(a) hereof
shall be made upon the earlier of (i) the payment to you of any Payment or (ii)
the imposition upon you or payment by you of any Excise Tax.
(c) If it is established pursuant to a final determination of a
court or an Internal Revenue Service proceeding or the opinion of Independent
Counsel that the Excise Tax is less than the amount taken into account under
Section 7(a) hereof, you shall repay to the Company within thirty (30) days of
your receipt of notice of such final determination or opinion the portion of the
Gross-Up Payment attributable to such reduction (plus the portion of the
Gross-Up Payment attributable to the Excise Tax and federal, state and local
income tax imposed
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on the Gross-Up Payment being repaid by you if such repayment results in a
reduction in Excise Tax or a federal, state and local income tax deduction) plus
any interest received by you on the amount of such repayment. If it is
established pursuant to a final determination of a court or an Internal Revenue
Service proceeding or the opinion of Independent Counsel that the Excise Tax
exceeds the amount taken into account hereunder (including by reason of any
payment the existence or amount of which cannot be determined at the time of the
Gross-Up Payment), the Company shall make an additional Gross-Up Payment in
respect of such excess within thirty (30) days of the Company's receipt of
notice of such final determination or opinion.
(d) In the event of any change in, or further interpretation of,
sections 280G or 4999 of the Code and the regulations promulgated thereunder,
you shall be entitled, by written notice to the Company, to request an opinion
of Independent Counsel regarding the application of such change to any of the
foregoing, and the Company shall use its best efforts to cause such opinion to
be rendered as promptly as practicable. All fees and expenses of such
Independent Counsel incurred in connection with this Agreement shall be borne by
the Company.
8. OTHER PROVISIONS
(a) THIS AGREEMENT WILL BE GOVERNED BY, CONSTRUED AND ENFORCED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, EXCLUDING ANY CONFLICTS OF
LAW, RULE OR PRINCIPLE THAT MIGHT OTHERWISE REFER TO THE SUBSTANTIVE LAW OF
ANOTHER JURISDICTION.
(b) Except as otherwise indicated, this Agreement is not assignable
without the written authorization of both parties, provided that the Company may
assign this Agreement to any entity to which the Company transfers substantially
all of its assets or to any entity which is a successor to the Company by
reorganization, incorporation, merger or similar business combination.
(c) Except as otherwise provided herein, the provisions of Paragraphs
4, 5 and 6 of this Agreement shall survive the termination of this Agreement.
(d) Except as otherwise provided in Paragraph 7 hereof, all payments to
you under this Agreement will be subject to the withholding of all applicable
employment taxes and income taxes; provided, however, that at your request the
parties hereto will use reasonable efforts to explore alternatives to allow the
Company to make charitable contributions on behalf of the employee by
redirecting a portion of your annual bonuses to charitable organization(s)
chosen by you in accordance with Paragraph 3(b) of this Agreement.
(e) This Agreement supersedes all previous employment agreements,
written or oral, between the Company and you. This Agreement may be amended only
by written amendment duly executed by both parties or their legal
representatives and authorized by action of the Board of Directors. Except as
otherwise specifically provided in this Agreement, no waiver by either party
hereto of any breach by the other party hereto of any condition or provision of
this Agreement to be performed by such other party shall be deemed a waiver of a
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January 11, 2000
Page 11
subsequent breach of such condition or provision or a waiver of a similar or
dissimilar provision or condition at the same or at any prior or subsequent
time.
(f) Any notice or other communication required or permitted
pursuant to the terms of this Agreement shall be in writing and shall be deemed
to have been duly given when delivered or mailed by United States mail, first
class, postage prepaid and registered with return receipt requested, addressed
to the intended recipient at his or its address set forth below and, in the case
of a notice or other communication to the Company, directed to the attention of
the Board of Directors with a copy to the Secretary of the Company, or to such
other address as the intended recipient may have theretofore furnished to the
sender in writing in accordance herewith, except that until any notice of change
of address is received, notices shall be sent to the following addresses:
IF TO YOU: IF TO THE COMPANY:
Xxxx X. Xxxxxx Dynegy Inc.
6540 Rutgers 0000 Xxxxxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000 Xxxxxxx, XX 00000
Attn: Chief Executive Officer
(g) If any one or more of the provisions or parts of a provision
contained in this Agreement shall for any reason be held to be invalid, illegal
or unenforceable in any respect, such invalidity or unenforceability shall not
affect any other provision or part of a provision of this Agreement, but this
Agreement shall be reformed and construed as if such invalid or illegal or
unenforceable provision or part of a provision had never been contained herein
and such provisions or part thereof shall be reformed so that it would be valid,
legal and enforceable to the maximum extent permitted by law.
(h) Neither you nor the Company will make or authorize any public
statement disparaging the other in its or his business interests and affairs.
Notwithstanding the foregoing, neither party shall be (i) required to make any
statement which it or he believes to be false or inaccurate, or (ii) restricted
in connection with any litigation, arbitration or similar proceeding or with
respect to its response to any legal process. The provisions in this Paragraph
8(h) shall survive the termination of your employment hereunder, irrespective of
the reason therefor.
(i) The waiver by the Company of breach of any provision of this
Agreement by you shall not operate or be construed as a waiver of any subsequent
breach by you. The waiver by you of a breach of any provision of this Agreement
by the Company shall not operate or be construed as a waiver of any subsequent
breach by the Company.
(j) You shall not be required to mitigate damages (or the amount
of any compensation provided under this Agreement to be paid) following your
termination of employment, by seeking employment or otherwise.
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January 11, 2000
Page 12
(k) If any provision of this Agreement as applied to either party
or to any circumstances shall be adjudged by a court of competent jurisdiction
to be void or unenforceable, the same shall in no way affect any other provision
of this Agreement or the validity or enforceability of this Agreement.
(l) 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.
(m) This Agreement may be executed in one or more counterparts,
which shall, collectively and separately, constitute one agreement.
(n) Notwithstanding anything to the contrary set forth in this
Agreement, the Company may cause any of its subsidiaries for which you render
services to pay or otherwise satisfy, in whole or in part, some or all of the
Company's obligations hereunder.
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January 11, 2000
Page 13
If the foregoing reflects your understanding of the terms of your
employment with the Company, please execute each copy of this letter in the
space provided below.
DYNEGY INC.
By:
---------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Chairman & CEO
AGREED AND ACCEPTED
this day of January, 2000
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--------------------------------
Xxxx X. Xxxxxx
