Exhibit 10.3
EXECUTION COPY
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
This Amended and Restated Employment Agreement, originally entered into
as of August 6, 1996, as amended by Amendment No. 1, dated as of April 16, 1997,
as amended by Amendment No. 2, dated as of March 11, 1999, is amended and
restated as of May 10, 1999 by and between MidAmerican Energy Holdings Company
(formerly CalEnergy Company, Inc. ("CalEnergy")), an Iowa corporation (the
"Company"), and Xxxxxxx X. Xxxx (the "Executive").
RECITALS
The Company desires to employ the Executive as its President and Chief
Operating Officer on the terms set forth in this Agreement, and the Executive
desires to accept such employment.
Accordingly, the Company and the Executive agree as follows:
AGREEMENT
Section 1. Defined Terms. Terms used but not defined in this
Agreement will have the meanings ascribed to them in Exhibit A to this
Agreement.
Section 2. Employment.
(a) The Company will employ the Executive as, and the
Executive will act as, the President and Chief Operating Officer of the Company,
subject to and upon the terms set forth in this Agreement, for the Term of
Employment.
(b) The Executive's primary place of employment will be Des
Moines, Iowa or such other place as is determined, prior to a Change in Control,
in good faith by the Chairman of the Board and Chief Executive Officer of the
Company (hereinafter referred to as the "Chairman of the Board") to be in the
best interests of the Company.
Section 3. Duties.
(a) The Executive (i) will perform and discharge the duties
incident to and consistent with his title of President and Chief Operating
Officer, and (ii) will perform and discharge such other duties, and will have
such other authority, as are delegated to him by the Chairman of the Board. In
performing such duties, the Executive will report directly to, and be subject to
the direction of, the Chairman of the Board. Prior to a Change in Control, the
Executive's title and duties may in good faith be modified by the Chairman of
the Board.
(b) The Executive will act, without any compensation in
addition to the compensation payable pursuant to this Agreement, as an officer
or member of the board of directors of any subsidiary of the Company, if so
appointed or elected.
(c) During the Term of Employment, the Executive (i) will
devote his entire time, attention and energies during normal business hours to
the business of the Company and its subsidiaries and (ii) will not, without the
written consent of the Chairman of the Board, perform any services for any other
Person or engage in any other business or professional activity, whether or not
performed or engaged in for profit.
(d) Notwithstanding subsection 3(c), the Executive, without
the consent of the Chairman of the Board, may (i) purchase securities issued by,
or otherwise passively invest his personal or family assets in, any other
company or business within the constraints imposed by the Policy of Business
Conduct referred to below, and (ii) engage in governmental, political,
educational or charitable activities, but only to the extent that those
activities (A) are not inconsistent with any direction of the Chairman of the
Board or any duties under this Agreement, and (B) do not interfere with the
devotion by the Executive of his entire time, attention and energies during
normal business hours to the business of the Company.
Section 4. Compensation.
(a) During the Term of Employment, the Company will pay the
Executive a base salary at an annual rate of $350,000, in substantially equal
periodic payments in accordance with the Company's practices for executive
employees, as determined from time to time by the Chairman of the Board.
(b) The Chairman of the Board will review the salary payable
to the Executive at least annually beginning in the fourth fiscal quarter of
1999. The Chairman of the Board, in his discretion, may increase the salary of
the Executive from time to time, but may not reduce the salary of the Executive
below the amount set forth in subsection 4(a) above.
(c) During the Term of Employment, the Executive shall be
eligible for consideration for an annual incentive merit bonus, for the
Executive's performance during the preceding fiscal year of the Company in an
amount determined by the Chairman of the Board in his discretion, by reference
to the accomplishment by the Executive of goals established by the Chairman of
the Board for the related fiscal year. The annual bonus paid to the Executive,
however, will not be less than the Minimum Bonus. 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."
(d) The Company will reimburse the Executive, subject to
compliance by the Executive with the Company's customary reimbursement
practices, for all reasonable and necessary out-of-pocket expenses incurred by
the Executive on behalf of the Company in the course of its business.
(e) The Company may reduce any payments made to the
Executive under this Agreement by any required federal, state or local
government withholdings or deductions for taxes or similar charges, or otherwise
pursuant to law, regulation or order.
(f) Any base salary payable to the Executive for any period
of employment of less than one year during the Term of Employment will be
reduced to reflect the actual number of days of employment during the period
except as provided in Sections 8(b) and 8(c).
Section 5. Other Benefits.
(a) During the Term of Employment, the Executive and his
dependents may participate in and receive benefits under any employee benefit
plan which the Company makes generally available to its employees and their
families, including any pension, life insurance, medical benefits, dental
benefits or disability plan, but only to the extent that the Executive or his
dependents otherwise satisfies the standards established for participation in
the plan. The terms of Executive's existing option agreements, as amended,
remain unaffected hereby, except as set forth in Sections 8(b) and 8(c) hereof.
(b) The Executive may take up to four weeks of vacation
during each full calendar year during the Term of Employment at a time mutually
convenient to the Executive and the Company, without loss of compensation or
other benefits under this Agreement.
Section 5A. Supplemental Retirement Benefits.
(a) Effective as of March 12, 1999, the closing date of the
merger between CalEnergy Company, Inc. and MidAmerican Energy Company, resulting
in the creation of MidAmerican Energy Holdings Company (the "Merger Date"), the
Executive shall irrevocably become a participant in the MidAmerican Energy
Company Supplemental Retirement Plan for Designated Officers (the "SERP").
(b) The Executive shall receive fully vested years of
participation credit under the SERP (for all purposes, including vesting and
benefit accrual) for all years of service (or portions thereof) performed at
CalEnergy prior to the Merger Date, and for certain additional years of service
(or portions thereof) as provided on Exhibit B attached hereto.
(c) The Executive shall be entitled to an Early Retirement
Benefit Payment Option under the SERP pursuant to which he may elect to commence
receiving benefits under the SERP after the Executive's retirement or disability
on or after attaining age 47, which payments shall be calculated pursuant to the
SERP but which shall be no less than as provided on Exhibit C hereto (including
for purposes of the following sentence). In the event of the Executive's death,
benefits shall be paid pursuant to Section 6.4 of the SERP; provided, however,
that any payment due under Section 6.4(a) of the SERP shall continue for the
remaining lifetime of the Executive's surviving "Spouse" (as defined in the
SERP) or for 360 months if the Executive dies without a surviving Spouse; and
further provided, however, that any payment due under Section 6.4(b) of the SERP
shall be payable without regard to the two-thirds and fifty percent limitations
contained therein.
(d) In the event of a Triggering Event (as defined below),
the Executive shall be entitled to the following under the SERP:
(i) for purposes of determining years of
participation credit, the Executive shall be credited
with additional years of participation (or portions
thereof) equal to the difference between age 65 and
the Executive's age (in years or portions thereof) on
the date of the Triggering Event, and
(ii) any benefits under the SERP not fully vested on
the date of the Triggering Event (including the
benefits arising by the foregoing subparagraph) shall
become fully vested as of such date.
For purposes of this Section 5A(d), a Triggering Event shall mean (x) the
termination of the Executive by the Company without Cause; (y) the resignation
by the Executive pursuant to Section 7(a)(vi) of this Agreement; or (z) a Change
in Control occurring after the Merger Date. All capitalized terms shall have the
meanings ascribed to them in Exhibit A of this Agreement.
(e) Notwithstanding anything herein or in the SERP to the
contrary, for purposes of determining any benefit payable to Executive under the
SERP, Executive's annual base salary and annual bonus shall never be less than
the base salary referenced in Section 4(a) hereof and that portion of the Annual
Bonus Compensation earned by Executive for the 1998 calendar year which the SERP
Committee has determined shall be included for purposes of calculating the SERP
benefit (i.e., $500,000).
(f) Within 30 days prior to a Change in Control, the Company
shall (i) establish a rabbi trust or an irrevocable standby letter of credit
with a U.S. Bank rated A or better, in each case naming the Executive as a
beneficiary and having terms reasonably satisfactory to the Executive in order
to provide security for the payment of benefits to Executive pursuant to the
SERP, and (ii) if a rabbi trust is established, deposit into the rabbi trust an
amount which, with the expected earnings thereon from reasonably prudent and
conservative investments (as confirmed by a certificate of a national accounting
firm of recognized standing which is independent of the Company) shall be
sufficient to satisfy the ultimate benefit obligations to Executive pursuant to
the SERP.
(g) A general release of claims under the SERP shall not be
required of the Executive in order to receive benefits thereunder.
(h) The Executive's entitlement to benefits under the SERP
shall be nonforfeitable and, Section 6.5 of the SERP notwithstanding, shall not
be adversely affected in any way upon termination of the Executive's employment
for Cause.
Section 6. Confidentiality and Post-Employment Restrictions.
(a) The Executive acknowledges that the Company and its
Affiliates have confidential information and trade secrets, whether written or
unwritten, with respect to carrying on their business, including sensitive
marketing, bidding, technological and engineering information and data, names of
past, present and prospective customers or partners of and vendors or suppliers
to the Company and its Affiliates, working relationships with governmental
agencies and officials, methods of pricing contracts and income and expenses
associated therewith, the international business strategy and relative ranking
of opportunities in various countries, negotiated prices and offers outstanding,
credit terms and status of accounts and the terms or circumstances of any
current or prospective business arrangements between the Company and its
Affiliates and any third parties ("Confidential Information and Trade Secrets").
As used in this Agreement, the term Confidential Information and Trade Secrets
does not include (i) information which becomes generally available to the public
other than as a result of a disclosure by the Executive, (ii) information which
becomes available to the Executive on a nonconfidential basis from a source
other than the Company or its Affiliates, or (iii) information known to the
Executive prior to any disclosure to him by the Company or its Affiliates. The
Executive further acknowledges that the Executive possesses a high degree of
knowledge of the independent energy industry and, in particular, has committed
to a long-standing relationship with the Company and its Affiliates as an
employee and officer, which has allowed, and will continue to allow, him access
to the Company's Confidential Information and Trade Secrets. Accordingly, any
employment by the Executive with another employer in the independent energy
industry or participation by him as a substantial investor in any such industry
may necessarily involve disclosure of the Company's Confidential Information and
Trade Secrets. Consequently, the Executive agrees that, if he voluntarily
resigns his employment with the Company for any reason other than (i) a breach
of this Agreement by the Company, or (ii) for Good Reason, he shall not at any
time during the two-year period after such resignation, directly or indirectly
accept employment by or invest in (except as a passive investor in a public
corporation or in a publicly issued partnership interest which, in either event,
would not exceed an ownership interest of 2% of the outstanding equity or
partnership interest) in any person, firm, corporation, partnership, joint
venture or business which is primarily engaged in the production or marketing of
steam or electrical energy or which otherwise directly competes with the
business of the Company or its controlled Affiliates and, further, the Executive
agrees that, to avoid the risk of disclosing or improperly using Confidential
Information or Trade Secrets, he shall not directly, or indirectly, provide
consulting or advisory services to any of such independent energy businesses.
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.
(b) Without the written consent of the Chairman of the
Board, the Executive will not, during and for three years after the Term of
Employment, (i) disclose any Confidential Information and Trade Secrets of the
Company or any Affiliate of the Company to any Person (other than the Company,
directors, officers or employees of the Company, its Affiliates or duly
authorized agents, attorneys or other representatives thereof), or (ii)
otherwise make use of any Confidential Information and Trade Secrets other than
in connection with authorized dealings with or by the Company and its
Affiliates.
(c) For a period of three years after the Term of
Employment, the Executive shall neither directly nor indirectly solicit, on
behalf of another employer, the employment of, or hire or cause another employer
to hire, any person who is then currently employed by the Company or an
Affiliate thereof, or otherwise induce, on behalf of another employer, such
person to leave the employment of the Company or an Affiliate thereof without
the prior written approval of the Chairman of the Board.
(d) The Executive will hold, on behalf of the Company and
its Affiliates and as the property of the Company and its Affiliates, all
memoranda, manuals, books, papers, letters, documents, computer discs, data and
software and other similar property obtained during the course of his employment
by the Company or its Affiliates and relating to the Company's or its Affiliates
business, and will return such property to the Company or its Affiliates at any
time upon demand by the Chairman of the Board and, in any event, within five
calendar days after the end of the Term of Employment.
(e) During the Term of Employment, Executive agrees to
comply in all material respects with the Company's Policy of Business Conduct as
in effect on the date hereof.
(f) If any of the provisions of, or covenants contained in,
this Section 6 are hereafter construed to be invalid or unenforceable in any
jurisdiction, the same shall not affect the remainder of the provisions or the
enforceability thereof in any other jurisdiction, which shall be given full
effect, without regard to the invalidity or unenforceability in such other
jurisdiction. If any of the provisions of, or covenants contained in, this
Section 6 are held to be unenforceable in any jurisdiction because of the
duration or geographical scope thereof, the parties agree that the court making
such determination shall have the power to reduce the duration or geographical
scope of such provision or covenant and, in its reduced form, such provision or
covenant shall be enforceable; provided, however, that the determination of such
court shall not affect the enforceability of this Section 6 in any other
jurisdiction.
Section 7. Termination of Employment.
(a) The employment of the Executive under this Agreement
will terminate on the earliest of: (i) written notice by the Executive of his
resignation other than for Good Reason; (ii) the day the Company gives to the
Executive written notice of termination without Cause; (iii) the day the Company
gives to the Executive written notice of termination for Cause; (iv) the
Permanent Disability of the Executive; (v) the death of the Executive; or (vi)
written notice by the Executive of his resignation for Good Reason.
(b) If the employment of the Executive is terminated under
this Agreement for any reason whatsoever, the obligations of the Executive under
Section 6 will remain in full force and effect to the extent provided therein,
and the termination will not abrogate any rights or remedies of the Company or
the Executive with respect to any breach of the Agreement, except as expressly
provided in Section 8.
Section 8. Payment Upon Termination.
(a) If the employment of the Executive is terminated
pursuant to subsections (i) or (iii) of Section 7(a), the Company will pay to
the Executive, within 30 calendar days, any base salary and reimbursable
expenses pursuant to Section 4(a) and Section 4(d) which are accrued but unpaid
through the Termination Date.
(b) If the employment of the Executive is terminated
pursuant to subsections (ii), (iv) or (v) of Section 7(a) prior to a Change in
Control, the Company will pay the Executive, subject to the Executive's
compliance in all material respects with his post-termination obligations under
Section 6, (i) within 30 calendar days, any base salary and reimbursable
expenses which are accrued and unpaid through such date, (ii) commencing one
month after the month of his Termination Date, 24 monthly payments each equal to
1/24 of a sum equal to twice his annual base salary then in effect pursuant to
Section 4 and (iii) 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
greater of (x) the Minimum Bonus or (y) 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). In addition, in the event of any such termination,
subject to the Executive's compliance in all material respects with his
post-termination obligations under Section 6, the Company agrees that (x) the
Company stock options previously granted to Executive will continue to vest
according to their terms within such next 24 months (beginning with the month
following the month in which the Termination Date occurs, after which time the
unvested remainder will lapse) and such vested options may be exercised within
the remaining term of such options as provided in the respective option
agreements, and (y) the Company shall continue in effect for Executive, for a
period of 24 months after the date of any such termination, the life insurance
benefits, medical benefits and dental benefits, the disability plan, the tax
preparation and investment advisory services and any other employee benefits
made generally available to senior executives of the Company on and after the
date hereof through the end of the 24- month post-termination period, subject to
such employee contributions and other terms and conditions as are applicable to
active employees generally and subject to subsequent modification or termination
of such plans to the extent such subsequent actions are also applicable to
active employees generally; provided that such plan benefits shall terminate
earlier on the date, if any, that comparable benefits are made available to the
Executive by any new employer. To the degree that any of the above employee
benefit programs are not available to Executive on account of his status as a
non-employee after termination of employment, the Company shall provide for
economically equivalent programs during the 24-month period or pay to executive
a lump sum cash amount designed to allow him to obtain economically equivalent
benefits or put him in the same economic position on an after tax basis.
(c) If the employment of the Executive is terminated on or
after a Change in Control pursuant to subsections (ii), (iv), (v) or (vi) of
Section 7(a), the Executive shall receive the same payments, additional option
vesting and benefits continuation described in Section 8(b) hereof, except that
the monthly payments described in clauses (ii) and (iii) of the first sentence
of Section 8(b) shall be aggregated and paid to Executive in a single lump sum
without any discount to reflect present value.
(d) If the employment of the Executive is terminated
pursuant to subsections (ii), (iv), (v) 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.
(e) If the employment of the Executive is terminated
pursuant to subsections (iv) or (v) at any time prior to a Change in Control or
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.
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.
Section 9. Remedies.
(a) The Company will be entitled, if it elects, to enjoin
any breach or threatened breach of, or enforce the specific performance of, the
obligations of the Executive under Sections 3 or 6, without showing any actual
damage or that monetary damages would be inadequate. Any such equitable remedy
will not be the sole and exclusive remedy for any such breach, and the Company
may pursue other remedies for such a breach.
(b) Any court proceeding to enforce this Agreement may be
commenced in federal courts, or in the absence of federal jurisdiction the state
courts, located in Omaha, Nebraska. The parties submit to the jurisdiction of
such courts and waive any objection which they may have to pursuit of any such
proceeding in any such court.
(c) Except to the extent that the Company elects to seek
injunctive relief in accordance with subsection 9(a), any controversy or claim
arising out of or relating to this Agreement or the validity, interpretation,
enforceability or breach of this Agreement will be submitted to arbitration in
Omaha, Nebraska, in accordance with the then existing rules of the American
Arbitration Association, and judgment upon the award rendered in any such
arbitration may be entered in any court having jurisdiction.
Section 10. Assignment. Neither the Company nor the Executive may sell,
transfer or otherwise assign their rights, or delegate their obligations, under
this Agreement, provided that the Company shall require any successor to all or
substantially all of the business, stock or assets of the Company to expressly
assume the Company's rights and obligations hereunder.
Section 11. Unfunded Benefits. All compensation and other benefits
payable to the Executive under this Agreement will be unfunded, and neither the
Company nor any Affiliate of the Company will segregate any assets to satisfy
any obligation of the Company under this Agreement. The obligations of the
Company to the Executive are not the subject of any guarantee or other assurance
of any Person other than the Company.
Section 12. Severability. Should any provision, paragraph, clause or
portion thereof of this Agreement be declared or be determined by any court or
arbitrator of competent jurisdiction to be illegal, unenforceable or invalid,
the validity or enforceability of the remaining parts, terms or provisions shall
not be affected thereby and said illegal or invalid part, term or provision
shall be deemed not to be a part of this Agreement. Alternatively, the court or
arbitrator having jurisdiction shall have the power to modify such illegal,
unenforceable or invalid provision so that it will be valid and enforceable,
and, in any case, the remaining provisions of this Agreement shall remain in
full force and effect.
Section 13. Miscellaneous.
(a) This Agreement may be amended or modified only by a
writing executed by the Executive and the Company.
(b) This Agreement will be governed by and construed in
accordance with the internal laws of the State of Nebraska.
(c) This Agreement constitutes the entire agreement of the
Company and the Executive with respect to the matters set forth in this
Agreement and supersedes any and all other agreements between the Company and
the Executive relating to those matters.
(d) Any notice required to be given pursuant to this
Agreement will be deemed given (i) when delivered in person or by courier or
(ii) on the third calendar day after it is sent by facsimile, with written
confirmation of receipt, if to the Company, to: Chairman of the Board,
MidAmerican Energy Holdings Company at 000 Xxxxx 00xx Xxxxxx, Xxxxx 000, Xxxxx,
Xxxxxxxx 00000, fax number (000) 000-0000, and, if to the Executive, at 000
Xxxxx Xxxxxx, Xxx Xxxxxx, Xxxx 00000, fax number (000) 000-0000 or to such other
address as may be subsequently designated by the Company or the Executive in
writing to the other party.
(e) A waiver by a party of a breach of this Agreement will
not constitute a waiver of any other breach, prior or subsequent, of this
Agreement.
IN WITNESS WHEREOF, the Company and the Executive have entered into
this Agreement as of May 10, 1999.
MIDAMERICAN ENERGY HOLDINGS COMPANY
By:____________________________
Xxxxxx X. XxXxxxxx
Senior Vice President
EXECUTIVE:
By:____________________________
Xxxxxxx X. Xxxx
EXHIBIT A
Defined Terms
"Affiliate" means, with respect to a Person, (a) any Person directly or
indirectly owning, controlling, or holding power to vote 10% or more of the
outstanding voting securities of the Person; (b) any Person 10% or more of whose
outstanding voting securities are directly or indirectly owned, controlled or
held with power to vote by the Person; (c) any Person directly or indirectly
controlling, controlled by or under common control with, the Person; and (d) any
officer or director of the Person, or of any Person directly or indirectly
controlling the Person, controlled by the Person or under common control with
the Person. As used in this definition, "control" means the possession, directly
or indirectly, of the power to direct or cause the direction of the management
and policies of a Person.
"Agreement" means this Employment Agreement dated as of August 6, 1996,
by and between the Company and the Executive, as it may be amended from time to
time in accordance with its terms.
"Board" means the Board of Directors of the Company.
"Cause" means any or all of the following:
(a) the willful and continued failure by the Executive to perform
substantially the services and duties contemplated by this Agreement
(other than any such failure resulting from the Executive's incapacity
due to disability);
(b) the willful engaging by the Executive in gross misconduct which is
injurious to the business or reputation of the Company in any material
respect;
(c) the gross negligence of the Executive in performing the services
contemplated by this Agreement which is injurious to the business or
reputation of the Company in any material respect; or
(d) Executive's conviction of, or pleading guilty or no contest to, a
felony involving moral turpitude.
"Change in Control" means (i) approval by the Company's stockholders of
(A) the dissolution of the Company, (B) a merger or consolidation of the Company
where the Company is not the surviving corporation, except for a transaction the
principal purpose of which is to change the state in which the Company is
incorporated, (C) a reverse merger in which the Company survives as an entity
but in which securities possessing more than 50 percent of the total combined
voting power of the Company's securities are transferred to a person or persons
different from those who hold such securities immediately prior to the merger or
(D) the sale or other disposition of all or substantially all of the Company's
assets; (ii) the direct or indirect acquisition by any Person or related group
of Persons (other than an acquisition from or by the Company or by a
Company-sponsored employee benefit plan or by a Person that directly or
indirectly controls, is controlled by, or is under common control with, the
Company) of beneficial ownership (within the meaning of Rule 13d-3 of the
Securities Exchange Act of 1934, as amended) of securities possessing more than
50 percent of the total combined voting power of the Company's outstanding
voting securities; or (iii) a change in the composition of the Board over a
period of thirty-six (36) months or less such that a majority of the Board
members cease, by reason of one or more contested elections for Board membership
or by one or more actions by written consent of stockholders, to be comprised of
individuals who either (A) have been Board members continuously since the
beginning of such period or (B) have been elected or nominated for election as
Board members during such period by at least a majority of the Board members
described in clause (A) who were still in office at the time such election or
nomination was approved by the Board.
"Code" means the Internal Revenue Code of 1986, as amended.
"Company" means MidAmerican Energy Holdings Company, an Iowa
corporation, and any successor or assign permitted under the Agreement.
"Disability" means, with respect to the Executive, that the Executive
has become physically or mentally incapacitated or disabled so that, in the
reasonable judgment of the Chairman of the Board, he is unable to perform his
duties under this Agreement and such other services as he performed on behalf of
the Company before incurring such incapacity or disability.
"Good Reason" means any of the following events, but only if such
event(s) occur on, after or in connection with a Change in Control: (i) the
failure by the Company to pay to the Executive, for a material period of time
and in a material amount, compensation due and payable by the Company under
Section 4(a) of this Agreement; (ii) any reduction by the Company of the title,
office, duties or authority of the Executive in any material respect; or (iii)
any relocation of the Executive's primary place of employment to a location more
than 25 miles from Omaha, Nebraska.
"Minimum Bonus" means, with respect to a fiscal year, $200,000.
"Permanent Disability" means a Disability which has continued for at
least six consecutive calendar months.
"Person" means any natural person, general partnership, limited
partnership, corporation, joint venture, trust, business trust, or other entity.
"Term of Employment" means the period of time beginning on August 6,
1996, and ending on the eighth anniversary of such date, unless earlier
terminated pursuant to Section 7(a) or automatically extended pursuant to the
following sentence. The Term of Employment will be automatically extended for
one year on each anniversary of the date of this Agreement beginning on the
fifth anniversary unless the Executive has given the Company, or the Company has
given the Executive, a notice declining automatic extension at least 365
calendar days before the anniversary.
"Termination Date" means the date of termination of employment of the
Executive pursuant to Section 7 of this Agreement.
EXHIBIT B
Xxxxxxx X. Xxxx
Credited Years of Service as of March 12, 1999: 11 years, 1 month
EXHIBIT C
Xxxxxxx X. Xxxx
Minimum Annual SERP benefit payment for retirement or disability payable on or
after attaining age 47: $244,812.
