EXHIBIT 10.18
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Consol Inc.
Consol Plaza
0000 Xxxxxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
(000) 000-0000
December 11, 1997
Mr. J. Xxxxx Xxxxxx
Interwest Mining Company
Xxx Xxxx Xxxxxx - Xxxxx 0000
000 Xxxxx Xxxx Xxxxxx
Xxxx Xxxx Xxxx, Xxxx 00000-0000
Dear Xxxxx:
This Letter Agreement (the "Agreement") sets forth the terms and
conditions under which you will be employed as President and Chief Executive
Officer of both Consol Energy Inc., a Delaware corporation ("CEI"), and its
wholly-owned subsidiary, Consol Inc., a Delaware corporation ("CI").
1. Definitions.
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As used in this Agreement, the following terms shall have the meanings
given below, respectively:
"Affiliate" shall mean CEI, CI, and any corporation controlled by CEI
or CI, or both of them, directly or indirectly.
"Term" shall mean the period commencing January 1, 1998, and ending on
December 31, 2002, subject to earlier termination as provided in Section 3
hereof.
"Shareholders Agreement" shall mean that shareholders agreement, dated
December 6, 1991, as amended, among the shareholders of CEI.
2. Term and Responsibilities.
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(a) During the Term, you will be an employee of CI, and serve as its
President and Chief Executive Officer. During the Term, the shareholders of CEI
undertake
Mr. J. Xxxxx Xxxxxx
December 11, 1997
Page 2
to elect you as a director of CEI, to cause your election as a director of CI,
and to cause the Boards of CEI and CI to elect you as Chief Executive Officer
and President of both Corporations. You hereby agree to accept such employment
and such positions.
(b) During the Term you will hold identical offices and directorships
in both CEI and CI, and you will serve those corporations accordingly. You
hereby confirm that you have been provided with a copy of the By-laws of each of
CEI and CI and, with respect to each of the offices and directorships specified
above, you will have the rights and duties stated in said By-laws for said
offices, respectively. You also confirm that you have been provided with a copy
of the Shareholders Agreement, including Annex G thereto, and, to the extent
that instrument affects the conduct of any of the offices or directorships of
CEI or CI you may hold hereunder, you agree to be bound thereby.
(c) During the Term, you will devote the necessary business time and
attention, and use your best efforts consistent with your current skills,
exclusively to furthering the business and affairs of CEI, CI and their
Affiliates. Without the prior written consent of the Boards of each of CEI and
CI, you will not serve on any other board of directors, or devote time to or
make, directly or indirectly, personal investments in any other entity that
would lessen your ability to perform your obligations hereunder or violate
conflict-of-interest rules of CEI, CI or their Affiliates.
(d) In your capacities as President and Chief Executive Officer of CEI
and CI, you will have charge and supervision of the business and affairs of CEI,
CI and their Affiliates, subject at all times to the direction and control of
the respective CEI and CI Boards. You will keep both Boards informed concerning
the business affairs of CEI, CI, and their Affiliates, you shall report directly
to the respective Boards of CEI and CI, and you shall operate within the
policies, strategic plans and financial goals approved by such Boards.
3. Termination.
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(a) Your engagement hereunder will terminate in every capacity (a)
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upon your death, or your sustaining a disability that would make you eligible
for disability pension under the CI Employee Retirement Plan (the "ERP"), (b)
---
effective at any time, by at least ninety (90) days' advance written notice
given by either party to the other; provided, that, the Board of CI shall have
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the right to terminate your employment for "cause" (as defined in paragraph (c)
below) at any time by written notice specifying the reason for such termination.
(b) In the event of termination of your employment hereunder during
the Term for any reason other than (i) termination by CI for cause (as defined
in paragraph (c)
Mr. J. Xxxxx Xxxxxx
December 11, 1997
Page 3
below) or (ii) your resignation, your then current base salary shall continue to
be paid to you (or your estate, in event of your death) until the end of the
Term, plus a one-time payment in an amount equal to any incentive compensation
received in the preceding twelve months. In such event, you (or your estate, in
the event of your death) shall also he entitled for purposes of the ERP to
receive service credit for the remainder of the Term.
(c) For purposes of this Agreement, "cause" shall mean (i) gross
negligence detrimental to CEI, CI or their Affiliates, or willful misconduct;
(ii) the commission of a felony or other crime involving moral turpitude; or
(iii) such personal misconduct by you as shall bring CEI, CI or their Affiliates
into disrepute. In the event of termination for cause, your compensation and
benefits shall cease and terminate at the end of the month in which the notice
of termination was given.
4. Compensation.
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(a) Base Salary.
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As compensation for your services during the Term, CI shall pay to you
in equal monthly installments, a base salary at an annual rate of $390,000, with
such additional amounts as may be determined from time to time by the Board of
CI in its sole discretion. Any increase in base salary approved by the Board of
CI will not be subsequently reduced or eliminated without your consent.
(b) Incentive Compensation.
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For services rendered during the Term, you will be eligible to
participate in all incentive compensation programs for senior management of CI,
including the short-term and long-term incentive pay programs, subject to their
respective terms and conditions.
(c) Benefit Plans.
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For services rendered during the Term, you will be eligible for all
employee benefit plans and policies applicable to salaried employees of CI. For
purposes of the ERP, you will be allotted eleven (11) years of additional
service credit, representing your years of employment at PacifiCorp and its
affiliated companies ("PacifiCorp"). It is agreed, however, that there shall be
deducted from the amount of any benefit payable to you under the ERP, an amount
equal to the aggregate amount of any benefits payable to you pursuant to the any
retirement or similar plans of PacifiCorp.
Mr. J. Xxxxx Xxxxxx
December 11, 1997
Page 4
5. Confidentiality and Non-Competition.
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(a) Except as required in furtherance of the business of CEI and CI
and their Affiliates, you agree that so long as you are entitled to receive
compensation under Section 4 hereof you will not at any time, reveal, divulge or
make known, either directly or through another, to any person, firm or
corporation, any confidential information received by you at any time touching
the operations or the financial, business or other affairs of CEI, CI or any of
their Affiliates or any customer or supplier of any of them; provided, that
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confidential information shall not include any information which (i) is known
---
generally to the public other than as a result of unauthorized disclosure by
you, (ii) becomes available to you on a non-confidential basis from a source
----
other than CEI, CI or any of their Affiliates, or (iii) was available to you on
-----
an non-confidential basis prior to its disclosure to you by CEI, CI or any of
their Affiliates.
(b) You agree that, for a period of twelve (12) months after the
termination of your engagement hereunder, you will not directly or indirectly
participate in any attempt to hire or solicit the employment of any person who
was at such termination, an employee, officer or director of CEI, CI or any of
their Affiliates.
(c) You agree that so long as you are entitled to receive compensation
under Section 4 hereof, you will not be a consultant, director, officer or
employee or have any interest either directly or indirectly in any individual,
partnership, corporation or other entity which is engaged in a business
competitive with the business of CEI, CI or any of their Affiliates in the
United States or Canada; provided, that the foregoing shall not prohibit the
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ownership by you of less than 5% of any class of outstanding voting securities
(or any options, warrants or rights to acquire such securities or any securities
convertible into such securities) of any corporation.
6. Binding Agreement.
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The provisions of this Agreement shall be binding on you and CEI, CI
and their successors and assigns. You hereby acknowledge that the undertakings
hereunder are unique to you, and any purported assignment by you without CEI's
and CI's prior written consent shall be void.
7. Miscellaneous.
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This Agreement shall be governed by and construed in accordance with
the laws of Pennsylvania. If any provision hereof shall for any reason be held
to be invalid,
Mr. J. Xxxxx Xxxxxx
December 11, 1997
Page 5
illegal or unenforceable in any respect, it shall not affect any other provision
hereof, and this Agreement shall be construed as if such invalid, illegal or
unenforceable provision had never been contained herein. If any provision
hereof shall for any reason be held to be excessively broad as to duration,
geographical scope, activity or subject, it shall be construed by limiting or
reducing it to the extent necessary to render it enforceable under then current
law. This Agreement shall supersede all prior understanding between you and CEI
and CI as to the terms of your employment. No waiver by any party of the breach
by the other of any provision hereof shall be deemed a waiver of any later or
other breach hereof, or a waiver of any other provision hereof. This Agreement
sets forth all the terms and understandings between the parties with respect to
the subject matter hereof and may not be waived, amended, discharged or
terminated orally or by any course of dealing by the parties, but only by an
instrument in writing signed by the party against whom any waiver, change,
discharge or termination is sought to be enforced.
Mr. J. Xxxxx Xxxxxx
December 11, 1997
Page 6
If the foregoing meets with your approval, please so indicate by
signing both copies of this Agreement and returning one to the attention of the
undersigned, whereupon it shall become a legally binding agreement among you,
CEI and CI.
Very truly yours,
CONSOL ENERGY INC.
By: /s/ B. R. Xxxxx
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Chairman
CONSOL INC.
By: /s/ B. R. Xxxxx
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Chairman
AGREED to as of the date
first above written.
By: /s/ J. Xxxxx Xxxxxx
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J. Xxxxx Xxxxxx
Mr. J. Xxxxx Xxxxxx
December 11, 1997
Page 7
The undersigned constitute all of the Shareholders of CEI, and agree
to cause the election of J. Xxxxx Xxxxxx to the offices and directorships
specified in the foregoing letter agreement, dated December 11, 1997, subject to
the terms and conditions thereof.
DUPONT ENERGY COMPANY
By: /s/ ILLEGIBLE SIGNATURE
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Title: DEC's Senior CEI Director
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RHEINBRAUN AG
By: /s/ Xx. Xxxxxx Xxxxxxx
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Title: Vorsitzendes des Vorstandes
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By: /s/ Xxxxx X. Breloer
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Title: Mitglied des Vorstandes
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RHEINBRAUN US GMBH
By: /s/ Xx. Xxxxx Xxxxxx
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Title: Geschaftsfuhrer
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By: /s/ Xx. Xxxx Xxxxxxxxx
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Title: Geschaftsfuhrer
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