EXECUTIVE BENEFITS PLAN AGREEMENT
Exhibit
10(hh)(1)
THIS
AGREEMENT, made this 20th day of August, 1993, by and between Houston Lighting & Power
Company, a Texas corporation (the “Company”), and Xxxxxx X. Xxxxxxxx
(“Employee”);
W I T N E S S E T H
WHEREAS,
the Company has adopted the Houston Industries Incorporated Executive Benefits
Plan (“Plan”) to provide disability benefits, salary continuation benefits and
death benefits for certain of its officers pursuant to which individual
executive benefits agreements are to be entered into with such officers to whom
coverage under the Plan has been extended; and
WHEREAS,
Employee has performed his duties with ability and distinction and the Company
recognizes that the future growth and continued success of the Company’s
business may well reflect the competent services rendered by Employee;
and
WHEREAS,
the Company desires to reward and retain the services of the Employee and also
to assist him in providing for contingencies of disability or death during
employment or after retirement by extending to Employee coverage under the Plan
as long as he continues to be an officer of the Company; and
WHEREAS,
Employee is willing to continue to serve as an officer of the Company, provided
the Company will agree to provide additional executive benefits in the form of
certain payments in the event of Employee’s disability or death;
and
WHEREAS,
Employee is considered a highly compensated employee or member of a select
management group of the Company;
NOW,
THEREFORE, in consideration of the premises, and the agreements hereinafter
contained, the parties hereto agree as follows:
1. Reference to
Plan. This Agreement is being entered into in accordance with
and subject to all of the terms, conditions and provisions of the Plan and
administrative interpretations thereunder, if any, which have been adopted by
the Committee designated under the Plan (the “Committee”) and are still in
effect on the date hereof. Employee has received a copy of, and is
familiar with the terms of, the Plan and any such administrative
interpretations, which are hereby incorporated herein by reference.
2. Benefits. Subject
to the conditions set forth in Paragraph 3 hereof and all other terms and
conditions of the Plan and this Agreement, the Company agrees as
follows:
(a) Supplemental Disability
Benefits. If the Employee becomes disabled during his
employment as an officer of the Company, he will receive benefits under the Long
Term Disability Plan of Houston Industries Incorporated as if the term “total
disability” under said Plan was defined as an illness or injury which prevents
him from performing the duties of an officer of the Company.
(b) Salary Continuation
Benefits. If the Employee dies during the period of his
employment as an officer of the Company, or dies during a period of disability
as described in (a) above, which disability had commenced while Employee was
employed as an officer of the Company, then the Company shall pay to the
Employee’s Beneficiary the following:
(i) 100%
of the Employee’s monthly salary at the time of his death shall be paid each
month for 12 months; and then
(ii) 50%
of the Employee’s monthly salary at the time of his death shall be paid each
month for the next 108 months or until the first day of the month in which the
Employee would have attained age 65, whichever is later.
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Such
monthly salary continuation payments shall be made by the Company to the
Employee’s Beneficiary, who shall be designated in writing or otherwise
determined as provided in Paragraph 10 below. These monthly salary
continuation benefits, however, shall not become payable if the Employee’s death
is by suicide, while sane or insane, within two years from the effective date of
the Prior Agreement.
(c) Supplemental Death
Benefits. If the Employee continues his employment as an
officer of the Company until his retirement on or after attaining age 65, then
upon the Employee’s subsequent death the Company shall pay to his designated
Beneficiary, determined in accordance with the provision of Paragraph 10 below,
50% of the Employee’s monthly salary at the time of his retirement for a period
of 72 months. These supplemental post-retirement death benefits,
however, shall not become payable if the Employee’s death is by suicide, while
sane or insane, within two years from the effective date of the Prior
Agreement.
(d) For
purposes of this Agreement, the Employee’s monthly salary shall include any
salary deferral under the Houston Industries Incorporated Deferred Compensation
Plan.
3. Conditions Applicable to
Payments of Benefits. The Company’s payment of benefits to the
Employee or his Beneficiary under this Agreement is in consideration of, and is
conditioned upon, the Employee’s performing or satisfying all of the following
agreements and conditions:
(a) The
Employee must continue to be employed as an officer of the Company until his
death, disability or retirement on or after attaining age 65, to receive any
benefits under this Agreement. If Employee is removed from office as
an officer of the Company but continues employment, this Agreement shall
terminate and shall have no further force and effect as of the first day that
Employee is no longer an officer of the Company.
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(b) The
Employee agrees to continue his continuous employment as an officer of the
Company until the earlier of (i) the date he attains age 65, or (ii) the date of
his death; provided, however, that periods of disability and authorized leaves
of absence described in Paragraph 8 below shall be considered periods of
continued employment during which Employee’s latest salary for full-time
employment shall be deemed to have continued for purposes of this
Agreement.
(c) The
Employee agrees to render such reasonable consulting and advisory services as
the Company may call upon him to provide and as his health may permit from the
date of his disability or retirement on or after attaining age 65 to the date of
his death.
(i) The
Company agrees that such consulting and advisory services shall not require the
Employee to be active in the Company’s day-to-day activities, and that the
Employee shall perform such services as an independent contractor.
(ii) The
Company further agrees to compensate the Employee for such consulting and
advisory services in an amount to be then agreed upon and to reimburse the
Employee for all out-of-pocket expenses incurred in connection with the
performance of such services.
(d) The
Employee agrees that he will not compete with the Company in violation of
Employee’s agreement in Paragraph 9 hereof.
4. Status of
Agreement. The benefits payable under this Agreement shall be
independent of, and in addition to, any other agreement relating to Employee’s
employment which may exist from time to time between the parties hereto, or any
other compensation payable by the Company to Employee, whether salary, bonus or
otherwise. This Agreement shall not be deemed to constitute a
contract of employment between the parties hereto, nor shall
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any
provision hereof, except as expressly stated, restrict the right of the Company
to discharge Employee or restrict the right of Employee to terminate his
employment.
5. Life Insurance and
Funding. The Company in its sole discretion may apply for and
procure, as owner and for its own benefit, insurance on the life of Employee in
such amounts and in such forms as the Company may choose. Employee
shall have no interest whatsoever in any such policy or policies, but at the
request of the Company he shall submit to medical examinations and supply such
information and execute such documents as may be required by the insurance
company or companies to which the Company has applied for
insurance.
6. Employee’s Rights To
Benefits. The rights of Employee or his Beneficiary to
benefits under this Agreement shall be solely those of an unsecured creditor of
the Company. Any insurance policy or other assets acquired or held by
the Company in connection with the liabilities assumed by it pursuant to this
Agreement shall not be deemed to be held under any trust for the benefit of
Employee or his Beneficiary or his estate or to be security for the performance
of the obligations of the Company but shall be and remain a general, unpledged,
and unrestricted asset of the Company.
7. Sale of the
Company. The sale of all or substantially all of the property
and assets of the Company otherwise than in the usual and regular course of its
business, or a merger of the Company wherein the Company is not the “surviving
corporation”, or any other transaction which in effect amounts to the sale of
the Company, shall not serve to terminate this Agreement.
8. Company and Employment
Defined. For purposes of this Agreement, the Company shall
also include any corporation which is an “Affiliate” as defined in Section
1.02(c) of the Plan. Neither the transfer of Employee from employment
by the Company to employment by an Affiliate nor the transfer of Employee
between Affiliates, or from employment by an
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Affiliate
to employment by the Company shall be deemed a termination of employment of
Employee by the Company or by an Affiliate.
Further,
the employment of Employee shall not be deemed to have been terminated or
interrupted because of his absence from active employment on account of
temporary illness or during authorized vacation or during temporary leaves of
absence, granted by the Company for reasons of professional advancement,
education, health or government service, or during military leave for any period
if Employee returns to active employment within 90 days after the termination of
his military leave, or during any period required to be treated as a leave of
absence by virtue of any valid law or agreement.
9. Forfeitures Because of
Competition. Employee agrees that, as a condition to his
qualifying for the disability, salary continuation or death benefits as provided
in Paragraph 2 hereof, he will not without the consent of the Company enter into
competition with the Company. For purposes of this Paragraph,
Employee shall be deemed to be in competition if he directly or indirectly,
whether as consultant, agent, officer, director, employee or otherwise enters
into an association with another business enterprise which then is one of the
principal competitors of the Company or an Affiliate respecting one or more
business activities of the Company or an Affiliate. The parties agree
that one of the essential considerations for the disability, salary continuation
and death benefits provided Employee hereunder is to protect and preserve the
goodwill of the Company and its Affiliates and their respective enterprises, and
that said goodwill will be substantially diminished in value if Employee were to
enter into competition with the Company or an Affiliate while entitled to
receive benefits hereunder. In the event Employee is deemed to be in
competition contrary to the provisions of this Paragraph 9,
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thereupon
he shall forfeit all rights to any payments of disability, salary continuation
and death benefits under this Agreement.
10. Beneficiary and Alternative
Beneficiary. Any salary continuation benefits or supplemental
death benefits payable under this Agreement shall be payable in accordance with
Paragraph 2 above in the manner and at the time specified therein to the
Employee’s Beneficiary, who shall be such person or persons, or the survivor
thereof, including corporations, unincorporated associations or trusts, as
Employee may have designated by written document referring to this Executive
Benefits Agreement delivered to and accepted by the
Committee. Employee may from time to time revoke or change any such
designation of his Beneficiary by written document delivered to the
Committee. Notwithstanding any provision hereof to the contrary, in
the event of the divorce of a designated beneficiary from the Employee or in the
event a designated beneficiary shall participate in any wrongful action
resulting in the death of Employee, the designation of such designated
beneficiary shall become null and void and such designated beneficiary shall
receive no benefits whatsoever under this Agreement. If there is no
valid Beneficiary designation on file with the Committee at the time of
Employee’s death, or if the person or persons designated therein shall have all
predeceased Employee or otherwise ceased to exist, the Employee’s Beneficiary
shall be, and any payment hereunder shall be made to, Employee’s spouse, if
living, or otherwise to his estate. If the person or persons
designated by Employee shall survive him but die before receiving all such
payments hereunder, the balance thereof payable to such deceased distributee
shall, unless Employee’s designation provided otherwise, be distributed to such
distributee’s estate.
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11. Withholding of
Taxes. The Company shall deduct from the amount of any
benefits payable hereunder any taxes required to be withheld by the federal or
any state or local government.
12. Prohibition Against
Assignment. The right of the Employee to benefits under this
Agreement shall not be assigned, transferred, pledged or encumbered in any way,
and any attempted assignment, transfer, pledge, encumbrance or other disposition
of such benefits shall be null and void and without effect; provided, however,
that the Company may assign this entire Agreement to any successor to all or
substantially all of the Company’s capital stock or business and assets and this
Agreement shall be binding on any such successor.
13. Binding
Effect. This Agreement shall be binding upon and inure to the
benefit of the Company, its successors and assigns, and the Employee, his heirs,
executors, administrators and legal representatives. As used in this
Agreement, the term “successor” shall include any person, firm, corporation or
other business entity which at any time, whether by merger, purchase or
otherwise, acquires all or substantially all of the assets or business of the
Company.
14. Entire
Agreement. This Agreement constitutes the entire understanding
between the parties hereto with respect to the subject matter hereof, and may be
modified only by a written instrument executed by both parties
hereto.
15. Governing
Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Texas.
16. Facility of
Payment. The Company may make any payments required by this
Agreement, when the recipient is incapacitated in the judgment of the Committee
by reason of physical or mental illness or infirmity: (a) to the
recipient directly; (b) to the guardian of the recipient’s personal estate; (c)
to the custodian of a minor recipient serving under the Uniform
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Gift to
Minors Act of Texas or any other state; or (d) in the event an inter vivos or
testamentary trust is then
in existence for the benefit of any such recipient, the Company may make any
such payments to the trustee or trustees of any such trust. The
Company may make the payment specified by this Agreement without liability of
anyone other than the specified payee. Employee hereby agrees, on
behalf of himself, his heirs and assigns, to hold the Company harmless from any
liability for making payments as specified by this Agreement unless and until
the Company is served with citation or other process issuing out of a court of
competent jurisdiction in connection with a suit instituted by someone for the
purpose of recovering or establishing an interest in such
payments. Notwithstanding any provision of this paragraph or any
other paragraph of this Agreement, if the Employee’s spouse survives the
Employee and is the Employee’s Beneficiary under this Agreement, all payments of
benefits under this Agreement after the Employee’s death shall be paid directly
to the Employee’s spouse during her life and to her estate if she dies before
receiving all such payments.
17. Severability. The
invalidity or enforceability of any provision hereof shall in no way affect the
validity or enforceability of any other provision.
18. Consent of
Spouse. Employee’s spouse is fully aware, understands, and
fully consents and agrees to the provisions of this Agreement and its binding
effect upon any community property interest in payments hereunder, and such
awareness, understanding, consent and agreement is evidenced by signing this
Agreement.
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IN WITNESS WHEREOF,
the parties have executed this Agreement (in multiple copies)
on the
day and year first above written, but effective as of July 1,
1993.
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Houston Lighting & Power Company
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By:
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/s/
X. X. Xxxxxxxxx
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X.
X. Xxxxxxxxx, President and
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Chief
Operating Officer
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ATTEST:
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/s/
Xxxxx X. Xxxxx
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Secretary
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(SEAL)
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/s/
Xxxxxx X. Xxxxxxxx
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Xxxxxx
X. Xxxxxxxx
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/s/
Xxxxx X. Xxxxxxxx
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Employee’s
Spouse
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