Exhibit 10.48
THIRD AMENDMENT TO EMPLOYMENT AGREEMENT
This Agreement, made and entered into on this 7th day
of February, 2000, and made effective as of February 7,
2000, by and between Enron Corp., (Employer") and Xxxxxxx X.
Xxxxxxxx ("Employee"), is an amendment to that certain
Employment Agreement between the parties entered into and
made effective on January 1, 1996 (the "Employment
Agreement").
WHEREAS, the parties desire to amend the Employment
Agreement as provided herein;
NOW, THEREFORE, for and in consideration of the
covenants contained herein, and for other good and valuable
considerations, the parties agree as follows:
1. Effective December 31, 1996, the Employment
Agreement was assigned by Enron North America Corp. f/k/a
Enron Capital & Trade Resources Corp. to Enron Corp.
Effective December 31, 1996, Enron Corp. assumed the
Employment Agreement. Any reference to Employer in the
Employment Agreement shall mean Enron Corp. Employee
consents to such assignment and assumption, and releases
Enron North America Corp. f/k/a Enron Capital & Trade
Resources Corp. from every obligation under the Employment
Agreement. Enron Corp. assumes every obligation of Enron
North America Corp. f/k/a Enron Capital & Trade Resources
Corp. under the Employment Agreement
2. Article 1: Employment and Duties: Section 1.1
shall be deleted in its entirety and the following inserted
in its place:
"1.1 The term of employment under this Agreement
shall be for eight years, from January 1, 1996 to December
31, 2003 (the "Term"). Employer agrees to employ Employee,
and Employee agrees to be employed by Employer, beginning as
of January 1, 1996, and continuing through December 31,
2003, subject to the terms and conditions of this
Agreement."
3. Article 2, Section 2.3 (d) shall be deleted and the
following Section 2.3 (d) shall be inserted in its place:
"(d) Employer shall loan to Employee the sum of 4
Million Dollars ($4,000,000.00) which shall accrue
interest at the October 1997 mid-term Applicable
Federal Rate (AFR) of 6.24%, compounded semi-
annually until maturity date of December 31, 2001.
To date, Employee has repaid 2 Million Dollars.
The outstanding amount of 2 Million Dollars shall
be forgiven by Employer if Employee fully performs
all duties and responsibilities expected of him in
his position and under this Agreement through
December 31, 2001. Employee shall be responsible
for 100% of the loan interest. In the event
Employee voluntarily terminates his employment or
is terminated for cause prior to December 31,
2001, the entire loan and interest shall be due
and payable."
4. Article 3, Section 3.2 is hereby deleted and the
following inserted in its place:
"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) Employee is required by Employer to be
permanently relocated to a city more than 50 miles
from the Houston area or Employee is transferred
or assigned from Employee's present position to a
position which involves an overall substantial and
material reduction in the nature or scope of
Employee's duties and responsibilities as
President and Chief Operating Officer of Employer
and within sixty days after such relocation or
transfer or assignment Employee provides Employer
with a written notice that such relocation or
transfer or assignment has occurred and that
Employee intends to terminate the employment
relationship under this provision, and thereafter
such relocation or transfer or assignment is not
corrected by Employer within thirty days;
(ii) by December 31, 2000, the members of the
Board of Directors of Employer and Employee have
not mutually agreed upon an acceptable employment
position and terms for Employee for the remaining
portion of the Term of this Agreement;
(iii) a Change of Control (as such term is
defined in Section 3.5 hereof);
(iv) any other 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
(v) 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), 3.2 (ii), Section 3.2
(iii), or 3.2(iv); 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 "Volun
tary Termination" if made pursuant to Section
3.2(v); the effect of such termination is
specified in Section 3.3."
5. Article 3, Section 3.5 is hereby deleted in its
entirety and the following inserted in its place:
"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 the following:
a.all outstanding awards under the Enron Corp. stock
plans (with the exception of the stock option grant of
November 16, 1999, Grant No. 122028) will vest;
b.Employee will have the lesser of three (3)
years or the term of the option to
exercise vested options;
c.Employer shall pay the remainder of
premiums related to the $8 million Split
Dollar Policy No. 11 502 764 issued May
27, 1997 under the Split Dollar Agreement
between Enron Corp., Xxxxxxx X. Xxxxxxxx,
and Xxxx Xxxxx Xxxxxxxx, Trustee of the
Xxxxxxx Xxxxx Xxxxxxxx Family 1996 Trust
entered into and effective May 23, 1997;
d. Employee shall receive a lump sum payment for each full
calendar year of the remaining Term of this Agreement equal
to the total of Employee's 2000 annual base salary of
$850,000.00, Employee's 1999 bonus payable in 2000 of
$3,000,000.00 and the 2000 long-term grant value of
$7,000,000.00; and
e. If an Involuntary Termination of Employee occurs prior
to December 31, 2001, said 2 million dollar loan described
at Section 2.3 (d) will be forgiven upon such termination.
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 Involun
tary 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."
4. Article 3, Sections 3.6 is hereby deleted in its
entirety and the following is inserted in its place:
"3.6. Upon the termination of the
employment relationship as a result of
Employee's death, Employee's heirs,
administrators, or legatees shall be entitled
to the compensation and benefits described at
Section 3.5."
5. Article 3, Section 3.7 is hereby deleted in its
entirety and the following is inserted in its place:
"3.7. Upon termination of the employment
relationship as a result of Employee becoming
disabled, Employee shall be entitled to the
compensation and benefits described at
Section 3.5."
6. Article 6, Section 6.2 is hereby deleted in its
entirety and the following inserted in its place:
"6.2 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 6.
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
any of its 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; or
(iii) induce any employee of Employer or
any of its affiliates to terminate his or her
employment with Employer or its 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 the
latter of (a) expiration of the Term or (b) one year after
termination of the employment relationship."
7. Article 7, Section 7.6 is hereby deleted in its
entirety and the following shall be inserted in its place:
"7.6 If a dispute arises out of or related to
this Agreement and the dispute cannot be
settled through direct discussions, Employer
and Employee agree that, except for disputes
arising out of a breach or alleged breach of
Articles 5 and 6, they shall first endeavor
to settle the dispute in an amicable fashion,
including the use of a mediator. If such
efforts fail to resolve the dispute, the
dispute, and any dispute arising under
Articles 5 and 6, shall be resolved as
follows:
(c) Except as provided in Subsection (b), any and all
claims, demands, cause of action, disputes, controversies,
and other matters in questions arising out of or relating to
this Agreement, any provision hereof, the alleged breach
thereof, or in any way relating to the subject matter of
this Agreement, involving Employer, Enron, Employee, and/or
their respective representatives, even through some or all
of such claims allegedly are extra-contractual in nature,
whether such claims sound in contract, tort, or otherwise,
at law or in equity, under state or federal law, whether
provided by statute or the common law, for damages or any
other relief, including all aspects of any disputes arising
out of Articles 5 or 6 [excepting only temporary or
preliminary injunctive relief as specified in subsection (b)
hereof] shall be resolved by binding arbitration pursuant to
the Federal Arbitration Act in accordance with the
Commercial Arbitration Rules then in effect with the
American Arbitration Association. The arbitration
proceeding shall be conducted in Houston, Texas. The
arbitration may be initiated by either party by the
providing to the other a written notice of arbitration
specifying the claims. Within thirty (30) days of the
notice of initiation of the arbitration procedure, each
party shall denominate one arbitrator. The two arbitrators
shall select a third arbitrator failing agreement on which
within thirty (30) days of the original notice, the parties
(or either of them) shall apply to the Senior Active United
States District Judge for the Southern District of Texas,
who shall appoint a third arbitrator. The three
arbitrators, utilizing the Commercial Arbitration Rules of
the American Arbitration Association, shall by majority vote
within 120 days of the selection of the third arbitrator,
resolve all disputes between the parties. There shall be no
transcript of the hearing before the arbitrators. The
arbitrators' decision shall be in writing, but shall be as
brief as possible. The arbitrators shall not assign the
reasons for their decision. The arbitrators' decision shall
be final and non-appealable to the maximum extent permitted
by law. Judgment upon any award rendered in any such
arbitration proceeding may be entered by any federal or
state court having jurisdiction. This agreement to
arbitrate shall be enforceable in either federal or state
court. The enforcement of this agreement to arbitrate and
all procedural aspects of this agreement to arbitrate,
including but not limited to, the construction and
interpretation of this agreement to arbitrate, the issues
subject to arbitration (i.e., arbitrability), the scope of
the arbitrable issues, allegations of waiver, delay or
defenses to arbitrability, and the rules governing the
conduct of the arbitration, shall be governed by and
construed pursuant to the Federal Arbitration Act and shall
be decided by the arbitrators. In deciding the substance of
any such claims, the arbitrators shall apply the substantive
laws of the State of Texas (excluding Texas choice-of-law
principles that might call for the application of some other
State's law); provided, however, it is expressly agreed that
the arbitrators shall have no authority to award treble,
exemplary, or punitive damages under any circumstances
regardless of whether such damages may be available under
Texas law, the parties hereby waiving their right, if any,
to recover treble, exemplary, or punitive damages in
connection with any such claims. Even though cessation of
employment under this Agreement may affect Employee's rights
under the Stock Option Grant Agreements in Sections 2.3 and
2.4 or the Split Dollar Agreement and/or the Enron Corp.
1991 Stock Plan ("Plan"), this agreement to arbitrate is not
applicable to disputes between or among Employer and
Employee based upon or arising out of the Stock Option Grant
Agreements referenced in Sections 2.3 and 2.4, the Split
Dollar Agreement, the Plan, or any other agreement, benefit
plan, or program heretofore or hereafter entered into
between Employee and Employer, or its affiliates.
(d) Notwithstanding the agreement to arbitrate contained in
Subsection 7.6(a), in the event that either party wishes to
seek a temporary restraining order or a preliminary or
temporary injunction to maintain the status quo pending the
Arbitrator's award, each party shall have the right to
pursue such temporary injunctive relief in court. The
parties agree that such action for a temporary restraining
order or a preliminary or temporary injunction may be
brought in the State or federal courts residing in Houston,
Xxxxxx County, Texas, or in any other forum in which
jurisdiction is appropriate, and each of Employer and
Employee hereby irrevocably appoints the Secretary of State
for the State of Texas as an agent for receipt of service of
process in connection with such litigation."
8. Article 7 is hereby amended and the following inserted
as Section 7.10:
"7.10 For purposes of this Agreement, the
following terms shall have the meanings
ascribed to them below:
(i) "Beneficial Owner" shall be defined by reference to
Rule 13(d)-3 under the Securities Exchange Act of 1934, as
then in effect; provided, however, and without limitation,
any individual, corporation, partnership, group, association
or other person or entity which has the right to acquire any
Voting Stock at any time in the future, whether such right
is contingent or absolute, pursuant to any agreement,
arrangement or understanding or upon exercise of conversion
rights, warrants or options, or otherwise, shall be the
Beneficial Owner of such Voting Stock.
(ii) "Change of Control" shall mean (A) Employer merges or
consolidates with any other corporation (other than one of
Employer's wholly owned subsidiaries) and is not the
surviving corporation (or survives only as the subsidiary of
another corporation), (B) Employer sells all or
substantially all of its assets to any other person or
entity, (C) Employer is dissolved, (D) any third person or
entity (other than the trustee or committee of any qualified
employee benefit plan of Employer) together with its
affiliates and associates shall become, directly or
indirectly, the Beneficial Owner of at least 30% of the
Voting Stock of Employer, or (E) the individuals who
constitute the members of the Board of Directors (the
"Incumbent Board") cease for any reason to constitute at
least a majority thereof, provided that any person becoming
a director whose election or nomination for election by
Employer's stockholders was approved by a vote of at least
80% of the directors comprising the Incumbent Board (either
by a specific vote or by approval of the proxy statement of
Employer in which such person is named as a nominee for
director, without objection to such nomination) shall be,
for purposes of this clause (E), considered as though such
person were a member of the Incumbent Board.
(iii) "Involuntarily Terminated" shall mean termination
of Employee's employment with Employer (A) by Employer for
any reason whatsoever except for Cause or (B) by Employee as
described at Section 3.2 (i), Section 3.2 (ii), Section 3.2
(iii), or Section 3.2 (iv); the effect of such termination
is specified in Section 3.5.
(iv) "Voting Stock" shall mean all outstanding shares of
capital stock of Employer entitled to vote generally in
elections for directors, considered as one class; provided,
however, that if Employer has shares of Voting Stock
entitled to more or less than one vote for any such share,
such reference to a proportion of shares of Voting Stock
shall be deemed to refer to such proportion of the votes
entitled to be cast by such shares."
9. Article 7 is hereby amended and the following is
inserted as Section 7.11:
"7.11 Notwithstanding anything to the
contrary in this Agreement, in the event that
any payment, distribution, or other benefit
provided by Employer to or for the benefit of
Employee, whether paid or payable or
distributed or distributable pursuant to the
terms of this Agreement or otherwise (a
"Payment"), would be subject to the excise
tax imposed by Section 4999 of the Internal
Revenue Code of 1986, as amended, or any
interest or penalties with respect to such
excise tax (such excise tax, together with
any such interest or penalties, are
hereinafter collectively referred to as the
"Excise Tax"), Employer shall pay to Employee
an additional payment (a "Gross-up Payment")
in an amount such that after payment by
Employee of all taxes (including any interest
or penalties imposed with respect to such
taxes), including any Excise Tax imposed on
any Gross-up Payment, Employee retains an
amount of the Gross- up Payment equal to the
Excise Tax imposed upon the Payments.
Employer and Employee shall make an initial
determination as to whether a Gross-up
Payment is required and the amount of any
such Gross-up Payment. Employee shall notify
Employer immediately in writing of any claim
by the Internal Revenue Service which, if
successful, would require Employer to make a
Gross-up Payment (or a Gross-up Payment in
excess of that, if any, initially determined
by Employer and Employee) within five days of
the receipt of such claim. Employer shall
notify Employee in writing at least five days
prior to the due date of any response
required with respect to such claim if it
plans to contest the claim. If Employer
decides to contest such claim, Employee shall
cooperate fully with Employer in such action;
provided, however, Employer shall bear and
pay directly or indirectly all costs and
expenses (including additional interest and
penalties) incurred in connection with such
action and shall indemnify and hold Employee
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 Employer's action. If, as a
result of Employer's action with respect to a
claim, Employee receives a refund of any
amount paid by Employer with respect to such
claim, Employee shall promptly pay such
refund to Employer. If Employer fails to
timely notify Employee whether it will
contest such claim or Employer determines not
to contest such claim, then Employer shall
immediately pay to Employee the portion of
such claim, if any, which it has not
previously paid to Employee."
This Agreement is the Third Amendment to the Employment
Agreement, and the parties agree that all other terms,
conditions and stipulations contained in the Employment
Agreement shall remain in full force and effect and without
any change or modification, except as provided herein.
IN WITNESS WHEREOF, the parties have duly executed this
Agreement as of the date first above written.
XXXXXXX X. XXXXXXXX ENRON CORP.
/s/ XXXXXXX X. XXXXXXXX /s/ XXXXXXX X. XxXXXXXXX
Date: Name: Xxxxxxx X. XxXxxxxxx
Title: Chair, Compensation &
Management Development Committee
Date: February 7, 2000
