Exhibit 10.42
EXECUTIVE EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement"), including the
attached Exhibit "A," is entered into between Enron Corp.,
an Oregon corporation, having offices at 0000 Xxxxx Xxxxxx,
Xxxxxxx, Xxxxx 00000 ("Employer"), and Xxxxxx X. Xxxxxx, an
individual currently residing at 00 Xxxx Xxxx Xxxxx, Xxx
Xxxxxxxxx, Xxxxx 00000 ("Employee"), to be effective as of
June 23, 1998 (the "Effective Date").
WITNESSETH:
WHEREAS, Employee is currently employed under that
certain Employment Agreement between Enron Development Corp.
and Xxxxxx X. Xxxxxx, effective January 1, 1996.
WHEREAS, Employee is willing to continue his employment
with Employer under the terms and conditions set forth in
this Employment Agreement ("Agreement"), effective June 23,
1998(the "Effective Date"), between Enron Corp. and Xxxxxx
X. Xxxxxx, and said Agreement shall supersede all previous
agreements; and
NOW, THEREFORE, for and in consideration of the mutual
promises, covenants, and obligations contained herein,
Employer and Employee agree as follows:
ARTICLE 1: EMPLOYMENT AND DUTIES:
1.1 Employer agrees to employ Employee, and Employee
agrees to be employed by Employer, beginning as of the
Effective Date and continuing until the date set forth on
Exhibit "A" (the "Term"), subject to the terms and
conditions of this Agreement.
1.2 Employee initially shall be employed in the
position set forth on Exhibit A. Employer may subsequently
assign Employee to a different position or modify Employee's
duties and responsibilities; provided however, in the event
Employer substantially reduces the duties or
responsibilities of Employee, Employee may elect to
terminate this Agreement under Section 3.2(ii) and said
termination shall constitute an Involuntary Termination for
purposes of Section 3.5. Moreover, Employer may assign this
Agreement and Employee's employment to Enron or any
affiliates of Enron. Employee agrees to serve in the
assigned position and to perform diligently and to the best
of Employee's abilities the duties and services appertaining
to such position as determined by Employer, as well as such
additional or different duties and services appropriate to
such position which Employee from time to time may be
reasonably directed to perform by Employer. Employee shall
at all times comply with and be subject to such policies and
procedures as Employer may establish from time to time.
1.3 Employee shall, during the period of Employee's
employment by Employer, devote Employee's full business
time, energy, and best efforts to the business and affairs
of Employer. Employee may not engage, directly or
indirectly, in any other business, investment, or activity
that interferes with Employee's performance of Employee's
duties hereunder, is contrary to the interests of Employer
or Enron, or requires any significant portion of Employee's
business time.
1.4 In connection with Employee's employment by
Employer, Employer shall endeavor to provide Employee access
to such confidential information pertaining to the business
and services of Employer as is appropriate for Employee's
employment responsibilities. Employer also shall endeavor
to provide to Employee the opportunity to develop business
relationships with those of Employer's clients and potential
clients that are appropriate for Employee's employment
responsibilities.
1.5 Employee acknowledges and agrees that, at all
times during the employment relationship Employee owes
fiduciary duties to Employer, including but not limited to
the fiduciary duties of the highest loyalty, fidelity and
allegiance to act at all times in the best interests of the
Employer, to make full disclosure to Employer of all
information that pertains to Employer's business and
interests, to do no act which would injure Employer's
business, its interests, or its reputation, and to refrain
from using for Employee's own benefit or for the benefit of
others any information or opportunities pertaining to
Employer's business or interests that are entrusted to
Employee or that he learned while employed by Employer.
Employee acknowledges and agrees that upon termination of
the employment relationship, Employee shall continue to
refrain from using for his own benefit or the benefit of
others any information or opportunities pertaining to
Employer's business or interests that were entrusted to
Employee during the employment relationship or that he
learned while employed by Employer. Employee agrees that
while employed by Employer and thereafter he shall not
knowingly take any action which interferes with the internal
relationships between Employer and its employees or
representatives or interferes with the external
relationships between Employer and third parties.
1.6 It is agreed that any direct or indirect interest
in, connection with, or benefit from any outside activities,
particularly commercial activities, which interest might in
any way adversely affect Employer or any of its affiliates,
involves a possible conflict of interest. In keeping with
Employee's fiduciary duties to Employer, Employee agrees
that during the employment relationship Employee shall not
knowingly become involved in a conflict of interest with
Employer or its affiliates, or upon discovery thereof, allow
such a conflict to continue. Moreover, Employee agrees that
Employee shall disclose to Employer's President any facts
which might involve such a conflict of interest that has not
been approved by Employer's President. Employer and
Employee recognize that it is impossible to provide an
exhaustive list of actions or interests which constitute a
"conflict of interest." Moreover, Employer and Employee
recognize there are many borderline situations. In some
instances, full disclosure of facts by the Employee to
Employer's President may be all that is necessary to enable
Employer or its affiliates to protect its interests. In
others, if no improper motivation appears to exist and the
interests of Employer or its affiliates have not suffered,
prompt elimination of the outside interest will suffice. In
still others, it may be necessary for Employer to terminate
the employment relationship. Employer and Employee agree
that Employer's determination as to whether a conflict of
interest exists shall be conclusive. Employer reserves the
right to take such action as, in its judgment, will end the
conflict.
1.7 Employee understands and acknowledges that the
terms and conditions of this Agreement constitute
confidential information. Employee shall keep confidential
the terms of this Agreement and shall not disclose this
confidential information to anyone other than Employee's
attorneys, tax advisors, or as required by law. Employee
acknowledges and understands that disclosure of the terms of
this Agreement constitutes a material breach of this
Agreement and could subject Employee to disciplinary action,
including without limitation, termination of employment.
ARTICLE 2: COMPENSATION AND BENEFITS:
2.1 Employee's monthly base salary during the Term
shall be not less than the amount set forth under the
heading "Monthly Base Salary" on Exhibit A, subject to
increase at the sole discretion of the Employer, which shall
be paid in semimonthly installments in accordance with
Employer's standard payroll practice. Any calculation to be
made under this Agreement with respect to Employee's Monthly
Base Salary shall be made using the then current Monthly
Base Salary in effect at the time of the event for which
such calculation is made.
2.2 While employed by Employer (both during the Term
and thereafter), Employee shall be allowed to participate,
on the same basis generally as other employees of Employer,
in all general employee benefit plans and programs,
including improvements or modifications of the same, which
on the effective date or thereafter are made available by
Employer to all or substantially all of Employer's
employees. Such benefits, plans, and programs may include,
without limitation, medical, health, and dental care, life
insurance, disability protection, and pension plans.
Nothing in this Agreement is to be construed or interpreted
to provide greater rights, participation, coverage, or
benefits under such benefit plans or programs than provided
to similarly situated employees pursuant to the terms and
conditions of such benefit plans and programs.
2.3 Employer shall not by reason of this Article 2 be
obligated to institute, maintain, or refrain from changing,
amending, or discontinuing, any such incentive compensation
or employee benefit program or plan, so long as such actions
are similarly applicable to covered employees generally.
Moreover, unless specifically provided for in a written plan
document adopted by the Board of Directors of either
Employer or Enron, none of the benefits or arrangements
described in this Article 2 shall be secured or funded in
any way, and each shall instead constitute an unfunded and
unsecured promise to pay money in the future exclusively
from the general assets of Employer.
2.4 Subject to the approval of the Compensation
Committee of the Enron Corp. Board of Directors, Employee
shall receive an option to purchase 100,000 shares of Enron
Corp. Common Stock. The grant shall be effective on the
date approved by the Compensation Committee and shall vest
33.3% on 5/4/1999, 5/4/2000, 5/4/2001 and shall be evidenced
by a grant agreement.
2.5 The Employer shall pay the Employee a Deferred
Project Plan ("DP Plan") bonus for SARAS in the amount of
$765,334.00 and for Puerto Rico in the amount of
$1,705,462.00, both amounts with applicable interest as
defined in the DP Plan. Employee shall vest immediately in
the total sum of these bonuses and 50% shall be paid to
Employee upon the execution of this Agreement and the
remaining 50% shall be paid at the start of commercial
operations subject to adjustment as provided for in the DP
Plan.
2.6 As of the Effective Date, Employee is fifty
percent (50%) vested in a Stock Option Grant Agreement dated
February 12, 1996, granting Employee an option to purchase
100,000 shares of the Employer's common stock. Employer
shall cause the vesting schedule of said Agreement to be
amended at the first meeting of the Employer's Compensation
Committee after the Effective Date to provide that twenty
five percent (25%) of said option shall become exercisable
on January 1, 1999, and twenty five percent (25%) of said
option shall become exercisable on January 1, 2000, subject
to the continuing terms and provisions thereof; provided,
however, said Agreement and the grant made thereby shall
become vested by the passage of time only, without
condition, regardless whether Employee's employment with
Employer terminates for any reason and whether or not
Employee continues to be employed by Employer or an
Affiliate of Employer. Further, in the event of Employee's
termination of employment with the Employer for any reason
prior to January 1, 2000, the unvested options shall become
fully vested. Employee shall have the lesser of three years
or the remaining term of exercise under said Grant Agreement
to exercise said option in the event of Employee's
termination of employment with the Employer for any reason
during the Term of this Agreement.
2.7 As of the Effective Date, Employee is forty
percent (40%) vested in a Stock Option Grant Agreement dated
February 10, 1997, granting Employee an option to purchase
285,483 shares of the Employer's common stock. Employer
shall cause the vesting schedule of said Agreement to be
amended at the first meeting of the Employer's Compensation
Committee after the Effective Date to provide that thirty
percent (30%) of said option shall become exercisable on
January 1, 1999, and thirty percent (30%) of said option
shall become exercisable on January 1, 2000, subject to the
continuing terms and provisions thereof; provided, however,
said Agreement and the grant made thereby shall become
vested by the passage of time only, without condition,
regardless whether Employee's employment with Employer
terminates for any reason and whether or not Employee
continues to be employed by Employer or an Affiliate of
Employer. Further, in the event of Employee's termination of
employment with the Employer for any reason prior to January
1, 2000, the unvested options shall become fully vested.
Employee shall have the lesser of three years or the
remaining term of exercise under said Grant Agreement to
exercise said option in the event of Employee's termination
of employment with the Employer for any reason during the
Term of this Agreement.
2.8 At the first meeting of the Employer's
Compensation Committee after the Effective Date, Employer
shall cause the vesting schedule of Employee's Restricted
Stock Award Agreement dated February 12, 1996, awarding
Employee 75,000 shares of the Employer's common stock to be
amended to immediately vest in and release to Employee,
sixty-six and 7/10ths percent (66.7%) in said Award and to
provide that the remaining unvested shares of Restricted
Stock shall be released and vested in Employee in two equal
amounts on January 31, 1999, and January 31, 2000,
conditioned on Enron International, Inc. meeting its net
income and funds flow targets as approved by the Enron Corp.
Board of Directors for calendar years 1998 and 1999,
respectively, as determined by the Compensation Committee in
its sole discretion.
2.9 As of the Effective Date, Employee is forty
percent (40%) vested in a Restricted Stock Award Agreement
dated February 10, 1997, awarding Employee 106,857 shares of
the Employer's common stock. Employer shall cause the
vesting schedule of said Agreement to be amended at the
first meeting of the Employer's Compensation Committee after
the Effective Date to provide that thirty percent (30%) of
said Award shall become vested in and released to Employee
on January 31, 1999, and thirty percent (30%) of said Award
shall become vested in and released to Employee on January
31, 2000, subject to the continuing terms and provisions
thereof; provided, however, said Agreement and the Award
made thereby shall become vested in and released to Employee
based on continued employment only and not tied to any EI
annual earnings targets.
2.10 All Enron International Options granted to
Employee by Enron International Inc. prior to the Effective
Date are hereby waived and forfeited by Employee, and are
rescinded.
2.11 Employer may withhold from any compensation,
benefits, or amounts payable under this Agreement all
federal, state, city, or other taxes as may be required
pursuant to any law or governmental regulation or ruling.
ARTICLE 3: TERMINATION PRIOR TO EXPIRATION OF TERM AND
EFFECTS OF SUCH TERMINATION:
3.1. Notwithstanding any other provisions of this
Agreement, Employer shall have the right to terminate
Employee's employment under this Agreement at any time prior
to the expiration of the Term for any of the following
reasons:
(i) For "cause" upon the determination by the
Employer's Board of Directors or Enron's
management committee (or, if there is no Enron
management committee, the highest applicable level
of Enron management) that "cause" exists for the
termination of the employment relationship. As
used in this Section 3.1(i), the term "cause"
shall mean [a] Employee's gross negligence or
willful misconduct in the performance of the
duties and services required of Employee pursuant
to this Agreement; [b] Employee has been convicted
of a felony; [c] Employee has willfully refused
without proper legal reason to perform the duties
and responsibilities required of Employee under
this Agreement which remains uncorrected for
thirty (30) days following written notice to
Employee by Employer of such breach;
[d] Employee's involvement in a conflict of
interest as referenced in Section 1.6 for which
Employer makes a determination to terminate the
employment of Employee which remains uncorrected
for thirty (30) days following written notice to
Employee by Employer of such breach; [e] Employee
has willfully engaged in conduct that Employee
knows or should know is materially injurious to
Employer, Enron, or any of their respective
subsidiaries; [f] Employee's material breach of
any material provision of this Agreement or
corporate code or policy which remains uncorrected
for thirty (30) days following written notice to
Employee by Employer of such breach; or [g]
Employee violates the Foreign Corrupt Practices
Act or other applicable United States law as
proscribed by Section 5.1. It is expressly
acknowledged and agreed that the decision as to
whether "cause" exists for termination of the
employment relationship by Employer is delegated
to the Employer's management committee (or, if
there is no management committee, the highest
applicable level of Employer's management) for
determination. If Employee disagrees with the
decision reached by Employer's management
committee (or, if there is no management
committee, the highest applicable level of
Employer's management), the dispute will be
limited to whether Employer's management committee
(or, if there is no Enron management committee,
the highest applicable level of Employer's
management) reached its decision in good faith;
(ii) for any other reason whatsoever, with or without
cause, in the sole discretion of Employer's board
of directors;
(iii) upon Employee's death; or
(iv) upon Employee's becoming disabled so as to entitle
Employee to benefits under Enron's long-term
disability plan or, if Employee is not eligible to
participate in such plan, then Employee is
permanently and totally unable to perform
Employee's duties for Employer as a result of any
medically determinable physical or mental
impairment as supported by a written medical
opinion to the foregoing effect by a physician
selected by Employer.
The termination of Employee's employment by Employer prior
to the expiration of the Term shall constitute a
"Termination for Cause" if made pursuant to Section 3.1(i);
the effect of such termination is specified in Section 3.4.
The termination of Employee's employment by Employer prior
to the expiration of the Term shall constitute an "Involun
tary Termination" if made pursuant to Section 3.1(ii); the
effect of such termination is specified in Section 3.5. The
effect of the employment relationship being terminated
pursuant to Section 3.1(iii) as a result of Employee's death
is specified in Section 3.6. The effect of the employment
relationship being terminated pursuant to Section 3.1(iv) as
a result of the Employee becoming incapacitated is specified
in Section 3.7.
3.2 Notwithstanding any other provisions of this
Agreement except Section 8.6, Employee shall have the right
to terminate the employment relationship under this
Agreement at any time prior to the expiration of the Term of
employment for any of the following reasons:
(i) a material breach by Employer of any material
provision of this Agreement which remains
uncorrected for 30 days following written notice
of such breach by Employee to Employer; or
(ii) for any other reason whatsoever, in the sole
discretion of Employee.
The termination of Employee's employment by Employee prior
to the expiration of the Term shall constitute an
"Involuntary Termination" if made pursuant to Section
3.2(i); the effect of such termination is specified in
Section 3.5. The termination of Employee's employment by
Employee prior to the expiration of the Term shall
constitute a "Voluntary Termination" if made pursuant to
Section 3.2(ii); the effect of such termination is specified
in Section 3.3.
3.3 Upon a "Voluntary Termination" of the employment
relationship by Employee prior to expiration of the Term,
all future compensation to which Employee is entitled and
all future benefits for which Employee is eligible shall
cease and terminate as of the date of termination. Employee
shall be entitled to pro rata salary through the date of
such termination, but Employee shall not be entitled to any
individual bonuses or individual incentive compensation not
yet paid at the date of such termination.
3.4 If Employee's employment hereunder shall be
terminated by Employer for Cause prior to expiration of the
Term, all future compensation to which Employee is entitled
and all future benefits for which Employee is eligible shall
cease and terminate as of the date of termination. Employee
shall be entitled to pro rata salary through the date of
such termination, but Employee shall not be entitled to any
individual bonuses or individual incentive compensation not
yet paid at the date of such termination.
3.5 Upon an Involuntary Termination of the employment
relationship by either Employer or Employee prior to the
expiration of the Term, Employee shall be entitled, in
consideration of Employee's continuing obligations hereunder
after such termination (including, without limitation,
Employee's non-competition obligations), to receive one
hundred twenty-five percent (125%) of the then current
Monthly Base Salary as if Employee's employment (which shall
cease on the date of such Involuntary Termination) had
continued for the full Term of this Agreement Employee
shall not be under any duty or obligation to seek or accept
other employment following Involuntary Termination and the
amounts due Employee hereunder shall not be reduced or
suspended if Employee accepts subsequent employment.
Employee's rights under this Section 3.5 are Employee's sole
and exclusive rights against Employer, Enron, or their
affiliates, and Employer's sole and exclusive liability to
Employee under this Agreement, in contract, tort, or
otherwise, for any Involuntary Termination of the employment
relationship. Employee covenants not to xxx or lodge any
claim, demand or cause of action against Employer for any
sums for Involuntary Termination other than those sums
specified in this Section 3.5. If Employee breaches this
covenant, Employer shall be entitled to recover from
Employee all sums expended by Employer (including costs and
attorneys fees) in connection with such suit, claim, demand
or cause of action.
3.6 Upon termination of the employment relationship as
a result of Employee's death, Employee's heirs,
administrators, or legatees shall be entitled to Employee's
pro rata salary through the date of such termination, but
Employee's heirs, administrators, or legatees shall not be
entitled to any individual bonuses or individual incentive
compensation not yet paid to Employee at the date of such
termination.
3.7 Upon termination of the employment relationship as
a result of Employee's incapacity, Employee shall be
entitled to his or her pro rata salary through the date of
such termination, but Employee shall not be entitled to any
individual bonuses or individual incentive compensation not
yet paid to Employee at the date of such termination.
3.8 Notwithstanding any provision herein to the
contrary, upon a termination of Employee's employment under
any of the circumstances described in Sections 3.6 or 3.7
above, Employee shall be entitled to receive a pro-rata
annual bonus payment through the date of such termination of
employment and Employee shall become fully vested in
specific grants and awards made or awarded to Employee under
long term incentive plans maintained by Employer and its
affiliates.
3.9 In all cases, the compensation and benefits
payable to Employee under this Agreement upon termination of
the employment relationship shall be offset against any
amounts to which Employee may otherwise be entitled under
any and all severance plans, and policies of Employer,
Enron, or its affiliates.
3.10 Termination of the employment relationship does
not terminate those obligations imposed by this Agreement
which are continuing obligations, including, without
limitation, Employee's obligations under Articles 6 and 7.
3.11 This Agreement governs the rights and obligations
of Employer and Employee with respect to Employee's salary,
bonuses, and other perquisites of employment. Except as
provided above in Section 2.5 and in Section 3.5, Employee's
rights and obligations with respect to stock options and
restricted stock are governed by Enron's Stock Plans and
respective grant agreements and with respect to incentive
compensation payments are governed by Award Agreements made
under such Plans.
ARTICLE 4: CONTINUATION OF EMPLOYMENT BEYOND TERM;
TERMINATION AND EFFECTS OF TERMINATION:
4.1 Should Employee remain employed by Employer beyond
the expiration of the Term specified on Exhibit "A," such
employment shall convert to a month-to-month relationship
terminable at any time by either Employer or Employee for
any reason whatsoever, with or without cause. Upon such
termination of the employment relationship by either
Employer or Employee for any reason whatsoever, all future
compensation to which Employee is entitled and all future
benefits for which Employee is eligible shall cease and
terminate. Employee shall be entitled to pro rata salary
through the date of such termination, but Employee shall not
be entitled to any individual bonuses or individual
incentive compensation not yet paid at the date of such
termination.
ARTICLE 5: UNITED STATES FOREIGN CORRUPT PRACTICES ACT AND
OTHER LAWS:
5.1. Employee shall at all times comply with United
States laws applicable to Employee's actions on behalf of
Employer, including specifically, without limitation, the
United States Foreign Corrupt Practices Act, generally
codified in 15 USC 78 (FCPA), as the FCPA may hereafter be
amended, and/or its successor statutes. If Employee pleads
guilty to or nolo contendere or admits civil or criminal
liability under the FCPA or other applicable United States
law, or if a court finds that Employee has personal civil or
criminal liability under the FCPA or other applicable United
States law, or if a court finds that Employee committed an
action resulting in any Enron entity having civil or
criminal liability or responsibility under the FCPA or other
applicable United States law with knowledge of the
activities giving rise to such liability or knowledge of
facts from which Employee should have reasonably inferred
the activities giving rise to liability had occurred or were
likely to occur, such action or finding shall constitute
"cause" for termination under this Agreement unless
Employer's management committee (or, if there is no
management committee, the highest applicable level of
Employer's management) determines that the actions found to
be in violation of the FCPA or other applicable United
States law were taken in good faith and in compliance with
all applicable policies of Employer and Enron.
ARTICLE 6: OWNERSHIP AND PROTECTION OF INFORMATION;
COPYRIGHTS:
6.1 All information, ideas, concepts, improvements,
discoveries, and inventions, whether patentable or not,
which are conceived, made, developed or acquired by Employ
ee, individually or in conjunction with others, during
Employee's employment by Employer (whether during business
hours or otherwise and whether on Employer's premises or
otherwise) which relate to Employer's business, products or
services (including, without limitation, all such
information relating to corporate opportunities, research,
financial and sales data, pricing and trading terms, evalua
tions, opinions, interpretations, acquisition prospects, the
identity of customers or their requirements, the identity of
key contacts within the customer's organizations or within
the organization of acquisition prospects, or marketing and
merchandising techniques, prospective names, and marks)
shall be disclosed to Employer and are and shall be the sole
and exclusive property of Employer. Moreover, all drawings,
memoranda, notes, records, files, correspondence, drawings,
manuals, models, specifications, computer programs, maps and
all other writings or materials of any type embodying any of
such information, ideas, concepts, improvements,
discoveries, and inventions are and shall be the sole and
exclusive property of Employer.
6.2 Employee acknowledges that the business of
Employer, Enron, and their affiliates is highly competitive
and that their strategies, methods, books, records, and
documents, their technical information concerning their
products, equipment, services, and processes, procurement
procedures and pricing techniques, the names of and other
information (such as credit and financial data) concerning
their customers and business affiliates, all comprise
confidential business information and trade secrets which
are valuable, special, and unique assets which Employer,
Enron, or their affiliates use in their business to obtain a
competitive advantage over their competitors. Employee
further acknowledges that protection of such confidential
business information and trade secrets against unauthorized
disclosure and use is of critical importance to Employer,
Enron, and their affiliates in maintaining their competitive
position. Employee hereby agrees that Employee will not, at
any time during or after his or her employment by Employer,
make any unauthorized disclosure of any confidential
business information or trade secrets of Employer, Enron, or
their affiliates, or make any use thereof, except in the
carrying out of his or her employment responsibilities
hereunder. Enron and its affiliates shall be third party
beneficiaries of Employee's obligations under this Section.
As a result of Employee's employment by Employer, Employee
may also from time to time have access to, or knowledge of,
confidential business information or trade secrets of third
parties, such as customers, suppliers, partners, joint
venturers, and the like, of Employer, Enron, and their
affiliates. Employee also agrees to preserve and protect
the confidentiality of such third party confidential
information and trade secrets to the same extent, and on the
same basis, as Employer's confidential business information
and trade secrets. Employee acknowledges that money damages
would not be sufficient remedy for any breach of this
Article 6 by Employee, and Employer shall be entitled to
enforce the provisions of this Article 6 by terminating any
payments then owing to Employee under this Agreement and/or
to specific performance and injunctive relief as remedies
for such breach or any threatened breach. Such remedies
shall not be deemed the exclusive remedies for a breach of
this Article 6, but shall be in addition to all remedies
available at law or in equity to Employer, including the
recovery of damages from Employee and his or her agents
involved in such breach.
6.3 All written materials, records, and other
documents made by, or coming into the possession of,
Employee during the period of Employee's employment by
Employer which contain or disclose confidential business
information or trade secrets of Employer, Enron, or their
affiliates shall be and remain the property of Employer,
Enron, or their affiliates, as the case may be. Upon
termination of Employee's employment by Employer, for any
reason, Employee promptly shall deliver the same, and all
copies thereof, to Employer.
6.4 If, during Employee's employment by Employer,
Employee creates any original work of authorship fixed in
any tangible medium of expression which is the subject
matter of copyright (such as videotapes, written
presentations on acquisitions, computer programs, drawings,
maps, architectural renditions, models, manuals, brochures,
or the like) relating to Employer's business, products, or
services, whether such work is created solely by Employee or
jointly with others (whether during business hours or
otherwise and whether on Employer's premises or otherwise),
Employee shall disclose such work to Employer. Employer
shall be deemed the author of such work if the work is
prepared by Employee in the scope of his or her employment;
or, if the work is not prepared by Employee within the scope
of his or her employment but is specially ordered by
Employer as a contribution to a collective work, as a part
of a motion picture or other audiovisual work, as a trans
lation, as a supplementary work, as a compilation, or as an
instructional text, then the work shall be considered to be
work made for hire and Employer shall be the author of the
work. If such work is neither prepared by the Employee
within the scope of his or her employment nor a work spec
ially ordered and is deemed to be a work made for hire, then
Employee hereby agrees to assign, and by these presents does
assign, to Employer all of Employee's worldwide right,
title, and interest in and to such work and all rights of
copyright therein.
6.5 Both during the period of Employee's employment by
Employer and thereafter, Employee shall assist Employer and
its nominee, at any time, in the protection of Employer's
worldwide right, title, and interest in and to information,
ideas, concepts, improvements, discoveries, and inventions,
and its copyrighted works, including without limitation, the
execution of all formal assignment documents requested by
Employer or its nominee and the execution of all lawful
oaths and applications for applications for patents and
registration of copyright in the United States and foreign
countries.
ARTICLE 7: POST-EMPLOYMENT NON-COMPETITION OBLIGATIONS:
7.1 As part of the consideration for the compensation
and benefits to be paid to Employee hereunder, in keeping
with Employee's duties as a fiduciary and in order to
protect Employer's interests in the confidential information
of Employer and the business relationships developed by
Employee with the clients and potential clients of Employer,
and as an additional incentive for Employer to enter into
this Agreement, Employer and Employee agree to the non-
competition provisions of this Article 7. Employee agrees
that during the period of Employee's non-competition
obligations hereunder, Employee will not, directly or
indirectly for Employee or for others, in any geographic
area or market where Employer or Enron or any of their
affiliated companies are conducting any business as of the
date of termination of the employment relationship or have
during the previous twelve months conducted any business:
(i) engage in any business competitive with the
business conducted by Employer;
(ii) render advice or services to, or otherwise assist,
any other person, association, or entity who is engaged,
directly or indirectly, in any business competitive with the
business conducted by Employer;
(iii) induce any employee of Employer or Enron or
any of their affiliates to terminate his or her employment
with Employer, Enron, or their affiliates, or hire or assist
in the hiring of any such employee by person, association,
or entity not affiliated with Enron.
These non-competition obligations shall extend until June
30, 2003.
7.2 Employee understands that the foregoing
restrictions may limit his or her ability to engage in
certain businesses anywhere in the world during the period
provided for above, but acknowledges that Employee will
receive sufficiently high remuneration and other benefits
(e.g., the right to receive compensation under Section 3.5
for the remainder of the Term upon Involuntary Termination)
under this Agreement to justify such restriction. Employee
acknowledges that money damages would not be sufficient
remedy for any breach of this Article 7 by Employee, and
Employer shall be entitled to enforce the provisions of this
Article 7 by terminating any payments then owing to Employee
under this Agreement and/or to specific performance and
injunctive relief as remedies for such breach or any
threatened breach. Such remedies shall not be deemed the
exclusive remedies for a breach of this Article 7, but shall
be in addition to all remedies available at law or in equity
to Employer, including, without limitation, the recovery of
damages from Employee and his or her agents involved in such
breach.
7.3 It is expressly understood and agreed that
Employer and Employee consider the restrictions contained in
this Article 7 to be reasonable and necessary to protect the
proprietary information of Employer. Nevertheless, if any
of the aforesaid restrictions are found by a court having
jurisdiction to be unreasonable, or overly broad as to
geographic area or time, or otherwise unenforceable, the
parties intend for the restrictions therein set forth to be
modified by such courts so as to be reasonable and
enforceable and, as so modified by the court, to be fully
enforced.
ARTICLE 8: MISCELLANEOUS:
8.1 For purposes of this Agreement the terms
"affiliates" or "affiliated" means an entity who directly,
or indirectly through one or more intermediaries, controls,
is controlled by, or is under common control with Enron or
Employer.
8.2 Employee shall refrain, both during the employment
relationship and after the employment relationship
terminates, from publishing any oral or written statements
about Employer, Enron, any of their respective subsidiaries
or affiliates, or any of such entities' officers, employees,
agents or representatives that are slanderous, libelous, or
defamatory; or that disclose private or confidential
information about Employer, Enron, any of their respective
subsidiaries or affiliates, or any of such entities'
business affairs, officers, employees, agents, or
representatives; or that constitute an intrusion into the
seclusion or private lives of Employer, Enron, any of their
respective subsidiaries or affiliates, or such entities'
officers, employees, agents, or representatives; or that
give rise to unreasonable publicity about the private lives
of Employer, Enron, any of their respective subsidiaries or
affiliates, or any of such entities' officers, employees,
agents, or representatives; or that place Employer, Enron,
any of their respective subsidiaries or affiliates, or any
of such entities' or its officers, employees, agents, or
representatives in a false light before the public; or that
constitute a misappropriation of the name or likeness of
Employer, Enron, any of their respective subsidiaries or
affiliates, or any of such entities' or its officers,
employees, agents, or representatives. A violation or
threatened violation of this prohibition may be enjoined by
the courts. The rights afforded the Enron entities and
affiliates under this provision are in addition to any and
all rights and remedies otherwise afforded by law.
8.3 For purposes of this Agreement, notices and all
other communications provided for herein shall be in writing
and shall be deemed to have been duly given when personally
delivered or when mailed by United States registered or
certified mail, return receipt requested, postage prepaid,
addressed as follows:
If to Employer:
Enron Corp.
0000 Xxxxx Xxxxxx
Xxxxxxx, Xxxxx 00000
Attention: Corporate Secretary
If to Employee, to the address shown on the first page
hereof.
Either Employer or Employee may furnish a change of address
to the other in writing in accordance herewith, except that
notices of changes of address shall be effective only upon
receipt.
8.4 This Agreement shall be governed in all respects
by the laws of the State of Texas, excluding any conflict-of-
law rule or principle that might refer the construction of
the Agreement to the laws of another State or country.
8.5 No failure by either party hereto at any time to
give notice of any breach by the other party of, or to
require compliance with, any condition or provision of this
Agreement shall be deemed a waiver of similar or dissimilar
provisions or conditions at the same or at any prior or
subsequent time.
8.6 If a dispute arises out of or related to this
Agreement, other than a dispute regarding Employee's
obligations under Article 6, or Article 7, and if the
dispute cannot be settled through direct discussions, then
Employer and Employee agree to first endeavor to settle the
dispute in an amicable manner by mediation, before having
recourse to any other proceeding or forum.
8.7 Each of Employer and Employee is a citizen of the
State of Texas. Employer's principal place of business is
in Houston, Xxxxxx County, Texas. Employee resides in
Xxxxxx County, Texas. This Agreement was negotiated and
signed in Houston, Texas. This Agreement shall be performed
in Houston, Texas. Any litigation that may be brought by
either Employer or Employee involving the enforcement of
this Agreement or the rights, duties, or obligations of this
Agreement, shall be brought exclusively in the State or
federal courts sitting in Houston, Xxxxxx County, Texas. In
the event that service of process cannot be effected upon a
party, each party hereby irrevocably appoints the Secretary
of State for the State of Texas as its or his agent for
service of process to receive the summons and other
pleadings in connection with any such litigation.
8.8 It is a desire and intent of the parties that the
terms, provisions, covenants, and remedies contained in this
Agreement shall be enforceable to the fullest extent
permitted by law. If any such term, provision, covenant, or
remedy of this Agreement or the application thereof to any
person, association, or entity or circumstances shall, to
any extent, be construed to be invalid or unenforceable in
whole or in part, then such term, provision, covenant, or
remedy shall be construed in a manner so as to permit its
enforceability under the applicable law to the fullest
extent permitted by law. In any case, the remaining
provisions of this Agreement or the application thereof to
any person, association, or entity or circumstances other
than those to which they have been held invalid or
unenforceable, shall remain in full force and effect.
8.9 This Agreement shall be binding upon and inure to
the benefit of Employer and any other person, association,
or entity which may hereafter acquire or succeed to all or
substantially all of the business or assets of Employer by
any means whether direct or indirect, by purchase, merger,
consolidation, or otherwise. Employee's rights and
obligations under Agreement hereof are personal and such
rights, benefits, and obligations of Employee shall not be
voluntarily or involuntarily assigned, alienated, or
transferred, whether by operation of law or otherwise,
without the prior written consent of Employer.
8.10 There exist other agreements between Employer and
Employee relating to the employment relationship between
them, e.g., the agreement with respect to company policies
contained in Employer's Conduct of Business Affairs booklet
and agreements with respect to benefit plans. This
Agreement replaces and merges previous agreements and
discussions pertaining to the following subject matters
covered herein: the nature of Employee's employment
relationship with Employer, which upon the execution of this
Agreement shall continue without interruption, and the term
and termination of such relationship. This Agreement
constitutes the entire agreement of the parties with regard
to such subject matters, and contains all of the covenants,
promises, representations, warranties, and agreements
between the parties with respect such subject matters. Each
party to this Agreement acknowledges that no representation,
inducement, promise, or agreement, oral or written, has been
made by either party with respect to such subject matters,
which is not embodied herein, and that no agreement,
statement, or promise relating to the employment of Employee
by Employer that is not contained in this Agreement shall be
valid or binding. Any modification of this Agreement will
be effective only if it is in writing and signed by each
party whose rights hereunder are affected thereby, provided
that any such modification must be authorized or approved by
the Board of Directors of Employer.
IN WITNESS WHEREOF, Employer and Employee have duly
executed this Agreement in multiple originals to be
effective on the date first stated above.
ENRON CORP.
By: XXXXXXX X. XXXXXXXX
Name: Xxxxxxx X. Xxxxxxxx
Title: President and Chief
Operating Officer
This 23rd day of June, 1998
XXXXXX X. XXXXXX
XXXXXX X. XXXXXX
This 23rd day of June, 1998
EXHIBIT "A" TO
EXECUTIVE EMPLOYMENT AGREEMENT
BETWEEN ENRON CORP. AND XXXXXX X. XXXXXX
Employee Name: Xxxxxx X. Xxxxxx
Term: June 1, 1998 through June 30, 2003
Position: Chief Executive Officer and Chief Operating
Officer, Enron International Inc.
Location: Houston, Texas
Reporting Relationship: Reports to Chairman of Enron
International Inc and Enron Corp. Office of
Chairman.
Monthly Base Salary: Effective 5/1/98, Forty Four
Thousand Five Hundred Eighty Three and 33/100
Dollars ($44,583.33) per month
Bonus: Employee shall be eligible to
participate in either the Enron Corp. Annual
Incentive Plan or the Enron International
Incentive Plan ("Plans"). All bonuses shall
be paid in accordance with the terms and
provisions of the Plans. Employee's target
bonus amounts shall be: (a) for 1998 - .75%
times EI net income through 6/30/98, plus a
$500,000 annual bonus target for the last six
months of 1998. In addition, if the Enron
Wholesale Group meets its financial targets,
Employee shall be eligible for an additional
$300,000 bonus target; (b) for 1999 forward
for remainder of Term - $500,000 annual bonus
target based on achievement of EI financial
targets plus an additional $300,000 annual
bonus target based on the Enron Wholesale
Group meeting its financial targets. All
targets are to be established by Employer's
board of directors.
Long Term Incentive
Compensation: Employee shall receive the
following long term incentive
compensation.
For 1998: (1) a grant pursuant to the
Enron Corp. 1991 Stock Plan ("91 Stock Plan")
of Restricted Stock in January, 1999, or in
January of a subsequent year if the following
cumulative provisions apply, having a grant
value of $1,060,000 and conditioned on Enron
International meeting at least 80% of its
1998 after tax net income target ("80%
Target"); such 80% Target shall be a
cumulative percentage over a five year period
beginning with 1998 so that if the employee
misses a target in any single year, the
employee shall have the ability to receive
such a grant in a future year based upon a
cumulative year average of 80% or greater;
such a grant of Restricted Stock shall vest,
conditioned on Employee's continued
employment with Employer, in annual 25%
increments starting the first anniversary of
its date of grant; and (2) a grant pursuant
to the '91 Stock Plan of 100,000 Stock
Options made at the time of entering into
this Agreement, to vest, conditioned on
Employee's continued employment with
Employer, in increments of 25% on December 31
on each of the next four years.
For years 1999 through 2002, Employee
shall be granted Stock Options pursuant to
the `91 Stock Plan having a value based on
Black Scholes (as determined annually by the
Compensation Committee of the Enron Corp.
Board of Directors similar to other Enron
Corp. executives) of $1,060,000 for each
year. For example if the Black Scholes value
of an Enron Corp. Stock Option was $10.60,
Employee would receive 100,000 Stock Options
($1,060,000/$10.60) These Stock Options will
be granted on 12/31/98, 12/31/99, 12/31/00,
and 12/31/01 and shall vest, conditioned on
Employee's continued employment with
Employer, in 25% increments on December 31 of
each of the four years following the date of
grant.
Employee shall also receive grants
pursuant to the `91 Stock Plan of Restricted
Stock in January 2000, 2001, 2002 and 2003,
or in January of a subsequent year (but no
subsequent year later than January 2003) if
the following cumulative provisions apply,
each having a grant value of $1,060,000,
conditioned on Enron International meeting at
least 80% of its after tax net income target
("80% Target") for calendar years 1999, 2000,
2001 and 2002, respectively. Such 80% Target
shall be a cumulative percentage over the
five year period (1998 - 2002) so that if an
80% Target is not met for any single year,
during the 1998-2002 period, Employee may
become eligible to receive such grant for
such a missed year if the cumulative average
of such 80% Targets for such missed year and
prior or subsequent year(s) during this 1998-
2002 period meets or exceeds the cumulative
80% Targets. Such grants of Restricted Stock
shall vest, conditioned on Employee's
continued employment with Employer, in annual
25% increments beginning on the anniversary
date of each date of grant.
Each grant of long term incentive
compensation pursuant to the `91 Stock Plan
shall have standard termination provisions
and be evidenced by a written award
agreement.
ENRON CORP.
By: Xxxxxxx X. Xxxxxxxx
Name: Xxxxxxx X. Xxxxxxxx
Title: President and Chief
Operating Officer
This 23rd day of June, 1998
XXXXXX X. XXXXXX
Xxxxxx X. Xxxxxx
This 23rd day of June, 1998
