Exhibit 10.34
AMENDMENT NO. 1
TO THE
EMPLOYMENT AGREEMENT
BETWEEN
CALENERGY COMPANY, INC.
AND
XXXXXXX X. XXXX
This Amendment No. 1 (the "Amendment") to the
Employment Agreement dated August 6, 1996 (the "Employment
Agreement") by and between CalEnergy Company, Inc., a
Delaware corporation (the "Company"), and Xxxxxxx X. Xxxx
(the "Executive"), is entered into as of April 16, 1997.
WHEREAS, the Company and the Executive are
presently parties to the Employment Agreement; and
WHEREAS, the Company and the Executive desire to
amend the Employment Agreement as set forth herein;
NOW, THEREFORE, the Employment Agreement is hereby
amended as follows:
(1) By adding the following sentences at the end
of Section 4(c):
"The Executive shall also be eligible to be
paid other bonuses for each fiscal year as
determined by the Chairman of the Board. The
Executive's annual incentive merit bonus,
together with all such other bonuses paid or
payable for the fiscal year (including any
amounts for which receipt is otherwise
deferred pursuant to a plan or arrangement
with the Company), is referred to herein as
`Annual Bonus Compensation.'"
(2) By adding the following sentence after the
last sentence of Section 6 (a):
"The preceding sentence notwithstanding, if
the Executive's resignation occurs upon or
after a Change in Control, he shall not be
precluded from accepting employment or
providing services to Xxxxx Xxxxxx Sons',
Inc. or any affiliate thereof."
(3) By deleting from the first sentence of
Section 8(b) the language following the parenthetical
"(iii)" and replacing it with the following:
"commencing one month after the month of his
Termination Date, 24 monthly payments each
equal to 1/24 of a sum equal to two times the
average Annual Bonus Compensation payable to
the Executive in respect of the two fiscal
years immediately preceding the year in which
the Executive's employment with the Company
terminates (with any such year for which no
bonus was payable included in such two year
average as a zero)."
(4) By deleting current Section 8(d) and
inserting new Section 8(d), to read as follows:
"(d) If the employment of the Executive is
terminated pursuant to subsections (ii) or
(vi) of Section 7(a), all Performance
Accelerated Stock Options ("PASOs") held by
the Executive on the Termination Date will
become vested and immediately exercisable on
such Termination Date and shall otherwise
remain exercisable for their term in
accordance with the terms thereof."
(5) By inserting immediately following Section
8(d) a new Section 8(e) to read as follows:
"(e) If the employment of the Executive is
terminated for any reason after a Change in
Control, then without further action by the
Company, the Board or any committee thereof,
the Executive may exercise any vested stock
options (including vested PASOs) held by the
Executive pursuant to existing procedures
approved by the Stock Option Committee for
cashless exercise, by surrendering previously
owned shares, electing to have the Company
withhold shares otherwise deliverable upon
exercise of such options, or by providing an
irrevocable direction to a broker to sell
shares and deliver all or a portion of the
proceeds to the Company, in any case in an
amount equal to the aggregate exercise price
and any tax withholding obligation attendant
to the exercise."
(6) By inserting immediately following Section 8
a new Section 8A, which shall read in its entirety as
follows:
"Section 8A. Certain Additional Payments by
the Company.
(a) Anything in this Agreement to the
contrary notwithstanding, in the event it shall be
determined that any payment, distribution, waiver
of Company rights, acceleration of vesting of any
stock options or restricted stock, or any other
payment or benefit in the nature of compensation
to or for the benefit of the Executive, alone or
in combination (whether such payment,
distribution, waiver, acceleration or other
benefit is made pursuant to the terms of this
Agreement or any other agreement, plan or
arrangement providing payments or benefits in the
nature of compensation to or for the benefit of
the Executive, but determined without regard to
any additional payments required under this
Section 8A) (a "Payment") would be subject to the
excise tax imposed by Section 4999 of the Code (or
any successor provision) or any interest or
penalties are incurred by the Executive with
respect to such excise tax (such excise tax,
together with any such interest and penalties, are
hereinafter collectively referred to as the
"Excise Tax"), then the executive shall be
entitled to receive an additional payment (a
"Gross-Up Payment") in an amount such that after
payment by the Executive of all taxes with respect
to the Gross-Up Payment (including any interest or
penalties imposed with respect to such taxes),
including, without limitation, any income taxes
(and any interest and penalties imposed with
respect thereto) and Excise Tax imposed upon the
Gross-Up Payment, the Executive retains an amount
of the Gross-Up Payment equal to the Excise Tax
imposed upon the Payments.
(b) Subject to the provisions of Section
8A(c), all determinations required to be made
under this Section 8A, including whether and when
a Gross-Up Payment is required and the amount of
such Gross-Up Payment and the assumptions to be
utilized in arriving at such determination, shall
be made by Deloitte and Touche, LLP, or such other
nationally recognized accounting firm then
auditing the accounts of the Company (the
"Accounting Firm") which shall provide detailed
supporting calculations both to the Company and
the Executive within 15 business days of the
receipt of notice from the Executive that there
has been a Payment, or such earlier time as is
requested by the Company. In the event that the
Accounting Firm is unwilling or unable to perform
its obligations pursuant to this Section 8A, the
Executive shall appoint another nationally
recognized accounting firm to make the
determinations required hereunder (which
accounting firm shall then be referred to
hereunder as the Accounting Firm). All fees and
expenses of the Accounting Firm shall be borne
solely by the Company. Any Gross-Up Payment,
determined pursuant to this Section 8A, shall be
paid by the Company to the Executive within five
days of the receipt of the Accounting Firm's
determination. Any determination by the
Accounting Firm shall be binding upon the Company
and the Executive. The parties hereto acknowledge
that, as a result of the potential uncertainty in
the application of Section 4999 of the Code (or
any successor provision) at the time of the
initial determination by the Accounting Firm
hereunder, it is possible that the Company will
not have made Gross-Up Payments which should have
been made consistent with the calculations
required to be made hereunder (an "Underpayment").
In the event that the Company exhausts its
remedies pursuant to Section 8A(c) and the
Executive thereafter is required to make a payment
of any Excise Tax, the Accounting Firm shall
determine the amount of the Underpayment that has
occurred and any such Underpayment shall be
promptly paid by the Company to or for the benefit
of the Executive.
(c) The Executive shall notify the Company
in writing of any claim by the Internal Revenue
Service that, if successful, would require the
payment by the Company of the Gross-Up Payment.
Such notification shall be given as soon as
practicable but no later than 20 business days
after the Executive is informed in writing of such
claim and shall apprise the Company of the nature
of such claim and the date on which such claim is
requested to be paid. The Executive shall not pay
such claim prior to the expiration of the 30-day
period following the date on which he gives such
notice to the Company (or such shorter period
ending on the date that any payment of taxes with
respect to such claim is due). If the Company
notifies the Executive in writing prior to the
expiration of such period that it desires to
contest such claim, the Executive shall:
(i) give the Company any information reasonably
requested by the Company relating to such
claim,
(ii) take such action in connection with
contesting such claim as the Company shall
reasonably request in writing from time to
time, including, without limitation,
accepting legal representation with respect
to such claim by an attorney reasonably
selected by the Company,
(iii) cooperate with the Company in good faith in
order effectively to contest such claim, and
(iv) permit the Company to participate in any
proceedings relating to such claim;
provided, however, that the Company shall bear and
pay directly all costs and expenses (including
additional interest and penalties) incurred in
connection with such contest and shall indemnify
and hold the Executive harmless, on an after-tax
basis, for any Excise Tax or income tax (including
interest and penalties with respect thereto)
imposed as a result of such representation and
payment of costs and expenses. Without limiting
the foregoing provisions of this Section 8A(c),
the Company shall control all proceedings taken in
connection with such contest and, at its sole
option, may pursue or forgo any and all
administrative appeals, proceedings, hearings and
conferences with the taxing authority in respect
of such claim and may, at its sole option, either
direct the Executive to pay the tax claimed and
xxx for a refund or contest the claim in any
permissible manner, and the Executive agrees to
prosecute such contest to a determination before
any administrative tribunal, in a court of initial
jurisdiction and in one or more appellate courts,
as the Company shall determine; provided, however,
that if the Company directs the Executive to pay
such claim and xxx for a refund, the Company shall
advance the amount of such payment to the
Executive, on an interest-free basis, and shall
indemnify and hold the Executive harmless, on an
after-tax basis, from any Excise Tax or income tax
(including interest or penalties with respect
thereto) imposed with respect to such advance or
with respect to any imputed income with respect to
such advance; and further provided that any
extension of the statute of limitations relating
to payment of taxes for the taxable year of the
Executive with respect to which such contested
amount is claimed to be due is limited solely to
such contested amount. Furthermore, the Company's
control of the contest shall be limited to issues
with respect to which a Gross-Up Payment would be
payable hereunder and the Executive shall be
entitled to settle or contest, as the case may be,
any other issue raised by the Internal Revenue
Service or any other taxing authority.
(d) If, after the receipt by the Executive
of an amount advanced by the Company pursuant to
Section 8A(c), the Executive becomes entitled to
receive any refund with respect to such claim, the
Executive shall (subject to the Company's
complying with the requirements of Section 8A(c))
promptly pay to the Company the amount of such
refund (together with any interest paid or
credited thereon after taxes applicable thereto).
If, after the receipt by the Executive of an
amount advanced by the Company pursuant to Section
8A(c), a determination is made that the Executive
shall not be entitled to any refund with respect
to such claim and the Company does not notify the
Executive in writing of its intent to contest such
denial of refund prior to the expiration of 30
days after such determination, then such advance
shall be forgiven and shall not be required to be
repaid and the amount of such advance shall
offset, to the extent thereof, the amount of Gross-
Up Payment required to be paid."
Except as provided herein and to the extent
necessary to give full effect to the provisions of this
Amendment, the terms of the Employment Agreement shall
remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have
entered into this Amendment effective as of April 16, 1997.
CALENERGY COMPANY, INC.
By: /s/ Xxxxx X. Xxxxx
Name: Xxxxx X. Xxxxx
Title: Chairman of the
Board
EXECUTIVE
/s/ Xxxxxxx X. Xxxx
Xxxxxxx X. Xxxx
