EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT made and entered into as of the 22nd day of April,
1997, by and among Cinergy Corp., a Delaware Corporation ("Cinergy"), Cinergy
Services, Inc., a Delaware Corporation ("Cinergy Services"), The Cincinnati Gas
& Electric Company, an Ohio Corporation ("CG&E"), PSI Energy, Inc., an Indiana
Corporation ("PSI"), and Xxxxxxxxx X. Xxxxxx (the "Executive"). Cinergy, Cinergy
Services, CG&E, and PSI will sometimes be referred to in this Agreement
collectively as the "Corporation".
WHEREAS, the Corporation desires that the Executive become an employee in
accordance with this Agreement;
WHEREAS, the Executive is willing to commit herself to the employ of the
Corporation and any successor thereto, on the terms and conditions set forth in
this Agreement and thus to forego opportunities elsewhere; and
WHEREAS, the parties desire to enter into this Agreement as of the date first
set forth above setting forth the terms and conditions for the employment
relationship of the Executive;
NOW, THEREFORE, IN CONSIDERATION of the mutual premises, covenants and
agreements set forth below, it is hereby agreed as follows:
1. Employment and Term.
a. The Corporation agrees to employ the Executive, and the Executive agrees to
be employed, in accordance with the terms and provisions of this Agreement for
the period set forth below (the "Employment Period").
b. The Employment Period of the Executive as provided in Section 1(a) will
commence on April 22, 1997, (the "Effective Date") and shall continue until
December 31, 2000; provided, however, commencing on January 1, 1999, and each
January 1 thereafter (the "Renewal Date"), the Employment Period of this
Agreement shall automatically be extended for one (1) additional year if neither
the Corporation not the Executive shall have given between December 1 and
December 15 prior to each applicable Renewal Date written notice to the other of
its intent to terminate this Agreement.
2. Duties and Powers of Executive.
a. Position. The Executive shall serve the Corporation in such responsible
executive capacity or capacities as the Board of Directors of Cinergy or Cinergy
Services (the Board of Directors of Cinergy or Cinergy Services, as the case may
be, may be referred to sometimes as the "Board") or the Chief Executive Officer
of Cinergy or the Chief Operating Officer of Cinergy may from time to time
determine and shall have such responsibilities, duties and authority as may be
assigned to her from time to time during the Employment Period by the Board or
the Chief Executive Officer of Cinergy or the Chief Operating Officer of Cinergy
that are consistent with such responsibilities, duties and authority. Upon the
Effective Date of this Agreement, the Executive shall initially serve as Vice
President, and Chief Financial Officer for the Corporation, but consistent with
the foregoing provisions of this Section 2(a), may be assigned to any other
position or positions by either the Board or the Chief Executive Officer of
Cinergy or the Chief Operating Officer of Cinergy during the Employment Period.
b. Place of Performance. In connection with the Executive's employment, the
Executive shall be based at the principal executive offices of the Corporation,
000 Xxxx Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxx, and, except for required business
travel to an extent substantially consistent with the present business travel
obligations of executives of the Corporation who have positions of authority
comparable to that of the Executive, the Executive shall not be required to
relocate to a new principal place of business which is more that thirty (30)
miles from the current principal place of business of the Corporation.
3. Compensation. The Executive shall receive the following compensation for her
services under this Agreement.
a. Salary and Transition Allowance. The Executive's annual base salary (the
"Annual Base Salary"), payable not less often than semi-monthly, shall be at the
annual rate of not less than $275,000.00. The Board may, from time to time,
direct such upward adjustments in the Annual Base Salary as the Board deems to
be necessary or desirable, including without limitation adjustments in order to
reflect increases in the cost of living. Any increase in the Annual Base Salary
shall not serve to limit or reduce any other obligation of the Corporation under
this Agreement. The Annual Base Salary shall not be reduced after any increase
thereof except for across-the-board salary reductions similarly affecting all
management personnel of Cinergy, Cinergy Services, PSI or CG&E. In addition to
the Annual Base Salary described in this Section, the Corporation shall pay to
the Executive a transition allowance in the gross sum of $50,000.00 on the
Effective Date or as soon thereafter as administratively feasible.
b. Retirement, Incentive, Welfare Benefit Plans and Other Benefits. During the
Employment Period and so long as the Executive is employed by the Corporation,
the Executive shall be eligible, and the Corporation shall take such actions as
may be necessary or required to cause the Executive to become eligible, to
participate in all short-term and long-term incentive, stock option, restricted
stock, performance unit, savings, retirement and welfare plans, practices,
policies and programs applicable generally to employees and/or other senior
executives of the Corporation who are considered Tier II executives for
compensation purposes, including, but not limited to, Cinergy's Annual Incentive
Plan, Cinergy's 1996 Long-Term Incentive Compensation Plan, Cinergy's Executive
Supplemental Life Insurance Program, PSI's Supplemental Retirement Plan and
PSI's Excess Benefit Plan, or any successors thereto, except with respect to any
plan, practice, policy or program to which the Executive has waived her rights
in writing.
c. Fringe Benefits and Perquisites. During the Employment Period and so long as
the Executive is employed by the Corporation, the Executive shall be entitled to
the following additional fringe benefits:
(i) The Corporation shall furnish to the Executive an automobile and shall pay
all of the related expenses for gasoline, insurance, maintenance and repairs;
(ii) The Corporation shall pay the initiation fee and the annual dues,
assessments and other membership charges of the Executive for membership charges
of the Executive for membership in a country club selected by the Executive;
(iii) The Corporation shall provide paid vacation for four (4) weeks per year
(or longer if permitted by the Corporation's policy); and
(iv) The Corporation shall furnish to the Executive annual financial planning
and tax preparation services. In addition, the Executive shall be entitled to
receive such other fringe benefits in accordance with the plans, practices,
programs and policies of the Corporation from time to time in effect,
commensurate with her position and at least comparable to those received by
other senior executives of the Corporation.
d. Expenses. The Corporation agrees to reimburse the Executive for all expenses,
including those for travel and entertainment, properly incurred by her in the
performance of her duties under this Agreement in accordance with the policies
established from time to time by the Board.
e. Relocation Benefits. The Executive shall be entitled to reimbursement from
the Corporation pursuant to the terms of the Corporation Relocation Program in
effect as of the day and year first written above, as well as all actual
expenses for temporary housing until such time as she has moved into a new
primary residence in the general area of the Corporation's principal corporate
office located in Cincinnati, Ohio. The expenses described in this Section shall
be "grossed up" to provide for adverse tax consequences to the Executive.
4. Termination of Employment.
a. Death. The Executive's employment shall terminate automatically upon the
Executive's death during the Employment Period.
b. By the Corporation for Cause. The Corporation may terminate the Executive's
employment during the Employment Period for Cause. For purposes of this
Agreement, "Cause" shall mean:
(i) The willful and continued failure by the Executive to substantially perform
the Executive's duties with the Corporation (other than any such failure
resulting from Executive's incapacity due to physical or mental illness) or any
such actual or anticipated failure after the issuance of a Notice of Termination
for Good Reason by the Executive pursuant to Section 4(c) after a written demand
for substantial performance is delivered to the Executive by the Board, which
demand specifically identifies the manner in which the Board believes that the
Executive has not substantially performed the Executive's duties, or
The breach by the Executive of the confidentiality provisions set forth in
Section 8 of this Agreement, or
(iii) The conviction of the Executive for the commission of a felony, including
the entry of a guilty or nolo contendere plea, or any willful or grossly
negligent action or inaction by the Executive that has a materially adverse
effect on the Corporation.
For purposes of this definition of "Cause," no act, or failure to act, on the
Executive's part shall be deemed "willful" unless done, or omitted to be done,
by the Executive not in good faith and without reasonable belief that the
Executive's act, or failure to act, was in the best interest of the Corporation.
Notwithstanding the above definition of "Cause", the Corporation may terminate
the Executive's employment during the Employment Period for a reason other than
Cause, but the obligations placed upon the Corporation in Section 5 shall apply.
c. By the Executive for Good Reason. The Executive may terminate her employment
during the Employment Period for Good Reason. For purposes of this Agreement,
"Good Reason" shall mean:
(i) The reduction in the Executive's Annual Base Salary as specified in Section
3(a) of this Agreement, or any other benefit or payment described in Section 3
of this Agreement, except for across-the-board salary reductions similarly
affecting all management personnel of Cinergy, Cinergy Services, CG&E, and PSI,
and changes to the employee benefits programs affecting all management personnel
of those Corporations, provided that such changes (either individually or in the
aggregate) will not result in a material adverse change with respect to the
benefits which the Executive was entitled to receive as of the Effective Date;
(ii) The material reduction without her consent of the Executive's title,
authority, duties or responsibilities from those in effect immediately prior to
the reduction;
(iii) Any breach by the Corporation of any other material provision (including
but not limited to the place of performance as specified in Section 2(b);
(iv) The Executive's disability due to physical or mental illness or injury
which precludes the Executive from performing any job for which she is qualified
and able to perform based upon her education, training or experience; or
(v) Any event which constitutes a "Change in Control" as defined in Section 4(f)
of this Agreement.
d. Notice of Termination. Any termination by the Corporation for Cause, or by
the Executive for Good Reason, shall be communicated by Notice of Termination to
the other party to this Agreement given in accordance with Section 10(b) of this
Agreement. For purposes of this Agreement, a "Notice of Termination" means a
written notice which:
(i) Indicates the specific termination provision in this Agreement relied upon;
(ii) To the extent applicable, sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Executive's
employment under the provision so indicated; and
(iii) If the Date of Termination (as defined in Section 4(e)) is other than the
date of receipt of such notice, specifies the termination date (which date shall
be not more than thirty (30) days after the giving of such notice). The failure
by the Executive or the Corporation to set forth in the Notice of Termination
any fact or circumstances which contributes to a showing of Good Reason or Cause
shall not waive any right of the Executive or the Corporation under this
Agreement or preclude the Executive or the Corporation from asserting such fact
or circumstances in enforcing the Executive's or the Corporation's rights under
this Agreement.
e. Date of Termination. "Date of Termination" means:
(i) If the Executive's employment is terminated by the Corporation for Cause, or
by the Executive for Good Reason, the date of receipt of the Notice of
Termination or any later date specified therein, as the case may be;
(ii) If the Executive's employment is terminated by the Corporation other than
for Cause, the date on which the Corporation notifies the Executive of such
termination; and
(iii) If the Executive's employment is terminated by reason of death, the date
of death.
f. Change in Control. A "Change in Control" shall be deemed to have occurred if
any of the following events occur after the Effective Date:
(i) Any "person" or "group" (within the meaning of Subsection 13(d) and
Paragraph 14(d)(2) of the Securities Exchange Act of 1934 (the "1934 Act") is or
becomes the beneficial owner (as defined in Rule 13d-3 under the 1934 Act),
directly or indirectly, of securities of Cinergy (not including in the
securities beneficially owned by such Person any securities acquired directly
from Cinergy or its affiliates) representing fifty percent (50%) or more of the
combined voting power of Cinergy's then outstanding securities, excluding any
person who becomes such a beneficial owner in connection with a transaction
described in clause (1) of paragraph (ii) below; or
(ii) There is consummated a merger or consolidation of Cinergy or any direct or
indirect subsidiary of Cinergy with any other corporation , other than (1) a
merger or consolidation with would result in the voting securities of Cinergy
outstanding immediately prior to such merger or consolidation continuing to
represent (either by remaining outstanding or by being converted into voting
securities of the surviving entity or any parent thereof) at least fifty percent
(50%) of the combined voting power of the securities of Cinergy or such
surviving entity or any parent thereof outstanding immediately such merger or
consolidation, or (2) a merger or consolidation effected to implement a
recapitalization of Cinergy (or similar transaction) in which no person is or
becomes the beneficial owner, directly or indirectly, of securities of Cinergy
(not including in the securities beneficially owned by such person any
securities acquired directly from Cinergy or its affiliates other than in
connection with the acquisition by Cinergy or its affiliates of a business)
representing twenty-five percent (25%) or more of the combined voting power of
Cinergy's then outstanding securities; or
During any period of two consecutive years, individuals who at the beginning of
that period constitute Cinergy's Board of Directors and any new director (other
than a director whose initial assumption of office is in connection with an
actual or threatened election contest, including but not limited to a consent
solicitation, relating to the election of directors of Cinergy) whose
appointment or election by Cinergy's shareholders was approved or recommended by
a vote of at least two-thirds (2/3) of the directors then still in office who
either were directors at the beginning of that period or whose appointment,
election or nomination for election was previously so approved or recommended
cease for any reason to constitute a majority of Cinergy's Board of Directors;
or
(iv) The shareholders of Cinergy approve a plan of complete liquidation or
dissolution of Cinergy or there is consummated an agreement for the sale or
disposition by Cinergy of all or substantially all of Cinergy's assets, other
than a sale or disposition by Cinergy of all or substantially all of Cinergy's
assets to an entity, at least sixty percent (60%) of the combined voting power
of the voting securities of which are owned by shareholders of Cinergy in
substantially the same proportions as their ownership of Cinergy immediately
prior to such sale.
g. Person. "Person" shall have the meaning given in Section 3(a)(9) of the 1934
Act, as modified and used in Sections 13(d) and 14(d) thereof; however, a Person
shall not include:
(i) The Corporation or any of its subsidiaries;
(ii) A trustee or other fiduciary holding securities under an employee benefit
plan of Cinergy or any of its subsidiaries;
(iii) An underwriter temporarily holding securities pursuant to an offering of
such securities; or
(iv) A corporation owned, directly or indirectly, by the stockholders of Cinergy
in substantially the same proportions as their ownership of stock of the
Corporation.
5. Obligations of the Corporation Upon Termination.
a. Certain Terminations. During the Employment Period, if the Corporation shall
terminate the Executive's employment (other than in the case of a termination
for Cause), the Executive shall terminate her employment for Good Reason or the
Executive's employment shall terminate by reason of death (termination in any
such case referred to as "Termination"):
(i) The Corporation shall pay to the Executive a lump sum amount, in cash, equal
to the sum of:
(1) the Executive's Annual Base Salary through the Date of Termination, and the
Executive's Transition Allowance, in each case to the extent most previously
paid;
(2) an amount equal to the Cinergy Annual Incentive Plan target percentage
benefit for the fiscal year that includes the Date of Termination multiplied by
a fraction the numerator of which shall be the number of days from the beginning
of such fiscal year to and including the Date of Termination and the denominator
of which shall be three hundred and sixty-five (365);
(3) an amount equal to her vested accrued benefit under the Cinergy Value
Creation Plan of the Cinergy 1996 Long-Term Incentive Compensation Plan; and
(4) any compensation previously deferred by the Executive (together with any
accrued interest or earnings thereon) and any accrued vacation pay, in each case
to the extent not previously paid.
(The amounts specified in clauses (1), (2), (3) and (4) shall be referred to in
this Agreement as the "Accrued Obligations".) The amounts specified in this
Section 5(a)(i) shall be paid within thirty (30) days after the Date of
Termination. The Accrued Obligations described in this Section are payable to
the Executive regardless of whether a Change in Control has occurred.
(ii) Prior to the occurrence of a Change in Control, and in the event of
Termination other than by reason of the Executive's death, then:
(1) the Corporation shall pay to the Executive a lump sum amount, in cash, equal
to the present value discounted using an interest rate equal to the prime rate
promulgated by CitiBank, N.A. and in effect as of the Date of Termination (the
"Prime Rate") of the Annual Base Salary, and the Cinergy Annual Incentive Plan
target percentage payable through the end of the Employment Period, each at the
rate, and using the same goals and factors, in effect at the time Notice of
Termination is given, and paid within thirty (30) days of the Date of
Termination;
(2) the Corporation shall pay to the Executive the present value (discounted at
the Prime Rate) of all amounts to which the Executive would have been entitled
had she remained in employment with the Corporation until the end of the
Employment Period, each, where applicable, at the rate of the Annual Base
Salary, and using the same goals and factors, in effect at the time Notice of
Termination is given, under the Cinergy Value Creation Plan of the Cinergy 1996
Long-Term Incentive Compensation Plan and the Cinergy Executive Supplemental
Life Insurance Program minus the present value (discounted at the Prime Rate) of
the benefits to which she is actually entitled under the above mentioned plans
and programs;
(3) the Corporation shall pay the value of all deferred compensation amounts
whether or not then payable; and
(4) the Corporation shall continue, until the end of the Employment Period,
medical and welfare benefits to the Executive and/or the Executive's family at
least equal to those which would have been provided if the Executive's
employment had not been terminated (excluding benefits to which the Executive
has waived her rights in writing), such benefits to be in accordance with the
most favorable medical and welfare benefit plans, practices, programs or
policies (the "M&W Plans") of the Corporation as in effect and applicable
generally to other senior executives of the Corporation and their families
during the ninety (90) day period immediately preceding the Date of Termination;
provided, however, that if the Executive becomes employed with another employer
and is eligible to receive medical or other welfare benefits under another
employer-provided plan, the benefits under the M&W Plans shall be secondary to
those provided under such other plan during such applicable period of
eligibility.
(iii) From and after the occurrence of a Change in Control and in the event of
Termination other than by reason of the Executive's death, then in lieu of any
further salary payments to the Executive for periods subsequent to the Date of
Termination and in lieu of any other benefits payable pursuant to Section
5(a)(ii) of this Agreement:
(1) The Corporation shall pay to the Executive a lump sum severance payment, in
cash, equal to the greater of:
(A) the present value of all amounts and benefits that would have been due under
Sections 5(a)(ii) of this Agreement, excluding Section 5(a)(ii)(4), and
(B) three (3) times the sum of (x) the higher of the Executive's Annual Base
Salary in effect immediately prior to the occurrence of the event or
circumstance upon which the Notice of Termination is based or in effect
immediately prior to the Change in Control, and (y) the higher of the amount
paid to the Executive pursuant to all incentive compensation or bonus plans or
programs maintained by the Corporation, in the year preceding that in which the
Date of Termination occurs or in the year preceding that in which the Change in
Control occurs; and
(2) For a thirty-six (36) month period after the Date of Termination, the
Corporation shall arrange to provide the Executive with life, disability,
accident and health insurance benefits substantially similar to those which the
Executive is receiving immediately prior to the Notice of Termination (without
giving effect to any reduction in such benefits subsequent to a Change in
Control which reduction constitutes Good Reason), except for any benefits that
were waived by the Executive in writing. Benefits otherwise receivable by the
Executive pursuant to this Section 5(a)(iii)(2) shall be reduced to the extent
comparable benefits are actually received by or made available to the Executive
without cost during the thirty-six (36) month period following the Executive's
termination of employment (and any such benefits actually received by the
Executive shall be reported to the Corporation by the Executive).
The Executive's employment shall be deemed to have been terminated following a
Change in Control of Cinergy without Cause or by the Executive for Good Reason
if, in addition to all other applicable Terminations, the Executive's employment
is terminated prior to a Change in Control without Cause at the direction of a
Person who has entered into an agreement with Cinergy or any of its subsidiaries
or affiliates, the consummation of which will constitute a Change in Control or
if the Executive terminates her employment for Good Reason prior to a Change in
Control if the circumstances or event which constitutes Good Reason occurs at
the direction of such Person.
b. Termination by the Corporation for Cause or by the Executive Other Than for
Good Reason. Subject to the provisions of Section 7 of this Agreement, if the
Executive's employment shall be terminated for Cause during the Employment
Period, or if the Executive terminates employment during the Employment Period
other than a termination for Good Reason, the Corporation shall have no further
obligations to the Executive under this Agreement other than the obligation to
pay to the Executive the Accrued Obligations and the amounts determined under
Section 5(c), plus any other earned but unpaid compensation, in each case to the
extent not previously paid.
c. Retirement Benefits on Termination. In addition to retirement benefits under
PSI's Pension Plan, PSI's Supplemental Retirement Plan, and PSI's Excess Benefit
Plan, or any successor thereto, the Executive shall be eligible to participate
in any supplemental executive retirement plan (commonly referred to as a "SERP")
sponsored by the Corporation.
d. Survival of Section 5(c). The provisions of Section 5(c) shall survive the
expiration or termination of this Agreement for any reason.
e. Certain Tax Consequences. In the event that the Executive becomes entitled to
the payments and benefits described in this Section 5 (the "Severance
Benefits"), if any of the Severance Benefits will be subject to any excise tax
(the "Excise Tax") imposed under Section 4999 of the Internal Revenue Code of
1986, as amended (the "Code"), the Corporation shall pay to the Executive an
additional amount (the "Gross-Up Payment") such that the net amount retained by
the Executive, after deduction of an Excise Tax on the Severance Benefits and
any federal, state and local income and employment tax and Excise Tax upon the
payment provided for by this Section 5, shall be equal to the Severance
Benefits. For purposes of determining whether any of the Severance Benefits will
be subject to the Excise Tax and the amount of such Excise Tax,
(i) any other payments or benefits received or to be received by the Executive
in connection with a Change in Control or the Executive's termination of
employment (whether pursuant to the terms of this Agreement or any other plan,
arrangement or agreement with the Corporation, any Person whose actions result
in a Change in Control or any Person affiliated with the Corporation or such
Person) 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,
unless in the opinion of tax counsel selected by the Corporation's independent
auditors and reasonably acceptable to the Executive such other payments or
benefits (in whole or in part) do not constitute parachute payments, including
by reason of Section 280G(b)(4)(A) of the Code, or such excess parachute
payments (in whole or in part) represent reasonable compensation for services
actually rendered, within the meaning of Section 280G(b)(4)(B) of the Code, in
excess of the Base Amount as defined in Section 280G(b)(3) of the Code allocable
to such reasonable compensation, or are otherwise not subject to the Excise Tax,
(ii) the amount of the Severance Benefits that shall be treated as subject to
the Excise Tax shall be equal to the lesser of
(1) the total amount of the Severance Benefits, or
(2) the amount of excess parachute payments within the meaning of Section
280G(b)(1) of the Code (after applying clause (i), above), and
(iii) the value of any non-cash benefits or any deferred payment or benefit
shall be determined by the Corporation's independent auditors in accordance with
the principles of Section 280G(d)(3) and (4) of the Code. For purposes of
determining the amount of the Gross-Up Payment, the Executive shall be deemed to
pay federal income taxes at the highest marginal rate of federal income taxation
in the calendar year in which the Gross-Up Payment is to be made and state and
local income taxes at the highest marginal rate of taxation in the state and
locality of the Executive's residence on the Date of Termination, net of the
maximum reduction in federal income taxes which would be obtained from deduction
of such state and local taxes. In the event that the Excise Tax is subsequently
determined to be less than the amount taken into account hereunder at the time
of termination of the Executive's employment, the Executive shall repay to the
Corporation, at the time that the amount of such reduction in Excise Tax is
finally determined, the portion of the Gross-Up Payment attributable to such
reduction (plus that portion of the Gross-Up Payment attributable to the Excise
Tax and federal, state and local income and employment tax imposed on the
Gross-Up Payment being repaid by the Executive to the extent that such repayment
results in a reduction in Excise Tax and/or a federal, state or local income or
employment tax deduction) plus interest on the amount of such repayment at the
rate provided in Section 1274(b)(2)(B) of the Code. In the event that the Excise
Tax is determined to exceed the amount taken into account hereunder at the time
of the termination of the Executive's employment (including by reason of any
payment the existence or amount of which cannot be determined at the time of the
Gross-Up Payment), the Corporation shall make an additional Gross-Up Payment in
respect of such excess (plus any interest, penalties or additions payable by the
Executive with respect to such excess) at the time that the amount of such
excess is finally determined. The Executive and the Corporation shall each
reasonably cooperate with the other in connection with any administrative or
judicial proceedings concerning the existence or amount of liability for Excise
Tax with respect to the Severance Benefits.
f. Other Fees and Expenses. The Corporation also shall pay to the Executive all
legal fees and expenses incurred by the Executive as a result of a termination
which entitles the Executive to the Severance Benefits (including all such fees
and expenses, if any, incurred in disputing any such termination or in seeking
in good faith to obtain or enforce any benefit or right provided by this
Agreement). Such payments shall be made within five (5) business days after
delivery of the Executive's written requests for payment accompanied with such
evidence of fees and expenses incurred as the Corporation reasonably may
require.
6. Non-exclusivity of Rights. Nothing in this Agreement shall prevent or limit
the Executive's continuing or future participation in any benefit, plan,
program, policy or practice provided by the Corporation and for which the
Executive may qualify (except with respect to any benefit to which the Executive
has waived her rights in writing), nor shall anything herein limit or otherwise
affect such rights as the Executive may have under any other contract or
agreement entered into after the date hereof with the Corporation. Amounts which
are vested benefits or which the Executive is otherwise entitled to receive
under any benefit, plan, program, policy or practice of, or any contract or
agreement entered into after the date hereof with, the Corporation at or
subsequent to the Date of Termination, shall be payable in accordance with such
benefit, plan, program, policy or practice, or contract or agreement, except as
explicitly modified by this Agreement.
7. Full Settlement: Mitigation. Except as provided in Sections 5(a)(ii)(4) and
5(a)(iii)(2) of this Agreement, the Corporation's obligation to make the
payments provided for in this Agreement and otherwise to perform its obligations
under this Agreement shall not be affected by any set-off, counterclaim,
recoupment, defense or other claim, right or action which the Corporation may
have against the Executive or others. In no event shall the Executive be
obligated to seek other employment or take any other action by way of mitigation
of the amounts (including amounts for damages for breach) payable to the
Executive under any of the provisions of this Agreement and such amounts shall
not be reduced whether or not the Executive obtains other employment. If the
Executive finally prevails with respect to any dispute between the Corporation,
the Executive or others as to the interpretation, terms, validity or
enforceability of (including any dispute about the amount of any payment
pursuant to) this Agreement, the Corporation agrees to pay all legal fees and
expenses which the Executive may reasonably incur as a result of any such
dispute.
8. Confidential Information. The Executive shall hold in a fiduciary capacity
for the benefit of Cinergy, all of its subsidiary companies and affiliates, as
well as all successors and assigns thereof (the "Cinergy Companies"), all
secret, confidential information, knowledge or data relating to the Cinergy
Companies, and their respective businesses, that shall have been obtained by the
Executive during the Executive's employment by the Corporation and that shall
not have been or now or subsequently have become public knowledge (other than by
acts by the Executive or representatives of the Executive in violation of this
Agreement). During the Employment Period and thereafter, the Executive shall
not, without the prior written consent of the Corporation or as may otherwise by
required by law or legal process, communicate or divulge any such information,
knowledge or data to anyone other than the Corporation and those designated by
it. The Executive understands that during the Employment Period, the Cinergy
Companies may be required from time to time to make public disclosure of the
terms or existence of the Executive's employment relationship in order to comply
with various laws and legal requirements. In addition to all other remedies
available to the Corporation in law and equity, this Agreement is subject to
termination by the Corporation for Cause under Section 4(b) in the event the
Executive violates any provision of this Section 8.
9. Successors.
a. This Agreement is personal to the Executive and, without the prior written
consent of the Corporation, shall not be assignable by the Executive otherwise
than by will or the laws of descent and distribution. This Agreement shall inure
to the benefit of and be enforceable by the Executive's legal representatives.
b. This Agreement shall inure to the benefit of and be binding upon the
Corporation, and its successors and assigns.
c. The Corporation shall require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of the
business and/or assets of the Corporation to assume expressly and agree to
perform this Agreement in the same manner and to the same extent that the
Corporation would be required to perform it if no such succession had taken
place.
10. Miscellaneous.
a. This Agreement shall be governed by and construed in accordance with the laws
of the State of Ohio, without reference to principles of conflict of laws. The
captions of this Agreement are not part of the provisions hereof and shall have
no force or effect. This Agreement may not be amended, modified, repealed,
waived, extended or discharged except by an agreement in writing signed by the
party against whom enforcement of such amendment, modification, repeal, waiver,
extension or discharge is sought. No person, other than pursuant to a resolution
of the Board or a committee thereof, shall have authority on behalf of the
Corporation to agree to amend, modify, repeal, waive, extend or discharge any
provision of this Agreement or anything in reference thereto.
b. All notices and other communications hereunder shall be in writing and shall
be given by hand delivery to the other party or by registered or certified mail,
return receipt requested, postage prepaid, addressed as follows:
If to the Executive: Xxxxxxxxx X. Xxxxxx Cinergy Corp. 000 Xxxx Xxxxxx Xxxxxx X.
X. Xxx 000 Xxxxxxxxxx, Xxxx 00000-0000 If to the Corporation: Cinergy Corp. 000
Xxxx Xxxxxx Xxxxxx P. O. Xxx 000 Xxxxxxxxxx, Xxxx 00000-0000 Attn: Chief
Executive Officer or to such other address as either party shall have furnished
to the other in writing in accordance with this Agreement. All notices and
communications shall be effective when actually received by the addressee.
c. The invalidity or unenforceability of any provision of this Agreement shall
not affect the validity or enforceability of any other provision of this
Agreement.
d. The Corporation may withhold from any amounts payable under this Agreement
such federal, state or local taxes as shall be required to be withheld pursuant
to any applicable law or regulation.
e. The Executive's or the Corporation's failure to insist upon strict compliance
with any provision of this Agreement or the failure to assert any right the
Executive or the Corporation may have under this Agreement, including without
limitation the right of the Executive to terminate employment for Good Reason
pursuant to Section 4(c) of this Agreement, or the right of the Corporation to
terminate the Executive's employment for Cause pursuant to Section 4(b) of this
Agreement, shall not be deemed to be a waiver of such provision or right or any
other provision or right of this Agreement.
f. This instrument contains the entire agreement of the Executive and the
Corporation with respect to the subject matter hereof; and all promises,
representations, understandings, arrangements and prior agreements are merged
into this Agreement and accordingly superseded.
g. This Agreement may be executed in counterparts, each of which shall be deemed
to be an original but all of which together will constitute one and the same
instrument.
h. The Corporation and the Executive agree that Cinergy shall be authorized to
act for the Corporation with respect to all aspects pertaining to the
administration and interpretation of this Agreement.
IN WITNESS WHEREOF, the Executive and the Corporation have caused this Agreement
to be executed as of the day and year first above written.
CINERGY CORP., CINERGY SERVICES, INC.,
THE CINCINNATI GAS & ELECTRIC COMPANY,
AND PSI ENERGY, INC.
By: _________________________
Xxxxx X. Xxxxxx
Vice Chairman and Chief Executive Officer
EXECUTIVE
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Xxxxxxxxx X. Xxxxxx
