THIRD AMENDMENT
Xxx X. Xxxxxxx
Page 4 of 3
THIRD AMENDMENT TO EMPLOYMENT AGREEMENT
This Third Amendment to Employment Agreement ("Third Amendment")
is dated the 2nd day of March, 1998, and is by and between Midcoast
Energy Resources, Inc. (the "Employer" or the "Company") and Xxx X.
Xxxxxxx (the "Employee").
W I T N E S S E T H:
WHEREAS, the Employer and the Employee entered into an
Employment Agreement (the "Agreement"), on January 1, 1993, to be
effective April 1, 1993 ("Effective Date"), as amended by that
certain Amendment to Employment Agreement, dated April 1, 1993 (the
"First Amendment"), and as further amended by that certain Second
Amendment to Employment Agreement, dated April 14, 1997 (the "Second
Amendment") (the Agreement, the First Amendment and the Second
Amendment shall be herein jointly referred to as the "Agreement as
Amended"); and
WHEREAS, Employer and Employee agree that it is in both of their
best interests to amend Section 5(A), Base Salary, Section 5(C),
Other Benefits, and Section 6(D), Termination of Employment, and add
Section 5(F), Executive Benefits, Section 6(C), Change of Control,
Section 8, Accelerated Vesting of Stock Options, Section 9, Covenant
Not To Compete, and Section 10, Solicitation of Customers.
NOW, THEREFORE, in consideration of the foregoing, the Employer
and the Employee agree as follows:
1. Section 5 (A), Base Salary, is deleted from the Agreement as
Amended and replaced with the following:
A. Base Salary. For all services rendered under this
Agreement as Amended, beginning January 1, 1998, the
Employer agrees to pay the Employee during the Employment
Period an annual minimum salary ("Salary") in the amount of
ONE HUNDRED FIFTY THOUSAND AND NO/100 DOLLARS ($150,000.00)
per year, payable in equal semi-monthly installments of SIX
THOUSAND TWO HUNDRED FIFTY AND NO/100 DOLLARS ($6,250.00)
each, or the equivalent amount payable on any other
periodic basis consistent with the Employer's payroll
procedures (but no less frequently than monthly). Employer
shall make appropriate deductions from Employee's Salary
for customary withholding taxes and other employment taxes
as required for salaried compensation under Federal, State
or Local laws. The foregoing is Employee's minimum Salary
and may be adjusted upward from time to time by Employer's
Board of Director's Compensation Committee. Employee's
Salary shall be in addition to any bonuses (in cash or
stock), which shall be given from time to time at the
discretion of Company's Board of Director's Compensation
Committee.
2. Section 5(C), Other Benefits, is amended by adding the
following:
C. Other Benefits. Employee shall be entitled to
vacation pay in accordance with Employer's written
corporate policy and to additional paid or unpaid vacation
as approved by the President. Such vacation shall be on a
calendar year basis. Effective January 1, 1998, Employee
shall be entitled to four (4) weeks vacation pay. In
addition, Employee shall be entitled to such holidays and
sick leave as well as other benefits, including fringe
benefits, provided other employees of Employer and other
benefits as may be agreed to by the parties.
3. The following is added to the Agreement as Amended:
Section 5, Compensation, Subsection F, Executive Benefits.
The Employee shall receive benefits similar to those
provided other employees in similar executive level
positions who from time to time may be employed by
Employer.
Xxxxxxx 0, Xxxxxxxxxxx of Employment, Subsection C, Change
of Control. This Agreement as Amended may be terminated at
Employee's option upon a Change of Control of Company. As
used herein, "Change of Control" means (i) the sale of all
or substantially all of the assets of Company to a person
(other than a wholly-owned subsidiary of Company) or
related group (as that term is used in Section 13(d)(3) of
the Securities Exchange Act of 1934) of persons (other than
a wholly-owned subsidiary of Company) as an entirety or
substantially as an entirety in one transaction or series
of related transactions, (ii) the first day on which a
majority of the members of the board of directors of
Company are not continuing Directors (i.e., any member of
the board of directors who is a member of the board of
directors on the date hereof or who was nominated for
election to the board of directors with the affirmative
vote of 2/3 of the continuing Directors who are members of
the board of directors at the time of such nomination or
elections), (iii) the acquisition by any person or group
(as so defined) or persons (other than a wholly-owned
subsidiary of Company) of more than twenty-five percent
(25%) of the total voting power entitled to vote generally
in the election of the directors, managers or trustees of
Company, (iv) the liquidation or dissolution of Company, or
(v) Employee is not the acting president and/or chief
executive officer of Employer. In the event Employee
elects to terminate his employment under this provision,
Employee shall receive a lump sum payment equal to fifty
percent (50%) of Employee's then current annual salary upon
written notice of such election.
Section 8: Accelerated Vesting of Stock Options. All of
the stock options previously or hereinafter granted to the
Employee under any and all agreements with Employer shall
become immediately exercisable and vested (i) should the
Employer discharge Employee, or (ii) upon termination of
this Agreement as Amended, as long as such vesting is
allowable under the Employer's stock option plan pursuant
to which Employee received such options.
Section 9: Covenant Not To Compete. For a period of twenty-
four (24) months from the date of any termination of
Employee's employment with the Employer, Employee shall not
(i) accept employment with or render any services to or
form an association with any business directly competitive
with the Employer in the areas where it is doing business,
or (ii) employ or offer to employ, in a professional
capacity in any business directly competitive with the
Employer, in the areas where it is doing business, anyone
who is or has been a director, office, shareholder, or
employee of the Employer. Employee acknowledges that the
restrictions imposed by this agreement are fully understood
and will not preclude Employee from becoming gainfully
employed following a termination of employment with the
Employer.
Section 10: Solicitation of Customers. Unless waived in
writing by Employer, Employee further agrees that he will
not, directly or indirectly, during the course of
employment and for two (2) years thereafter upon
termination of this employment contract either voluntarily
or involuntarily, or for any reason whatsoever, solicit the
trade or patronage of any of Employer's existing customers
or prospective customers with whom Employer is negotiating,
on the date of termination, regardless of the location of
such customers or prospective customers of the Employer
throughout the United States with respect to any
technologies, services, product, trade secret, or other
matters in which the Employer is active.
4. All other provisions of the Agreement as Amended shall remain in
full force and effect and shall not be affected by this Third
Amendment.
IN WITNESS HEREOF, the parties hereto have executed this Third
Amendment, as of the date first written above.
EMPLOYER: EMPLOYEE:
MIDCOAST ENERGY RESOURCES, INC.
By: ________________________________
_____________________________
Name: ______________________________ Xxx X. Xxxxxxx
Title: _______________________________
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