1
EXHIBIT 10.1
SPECIAL RETENTION AGREEMENT
This Special Retention Agreement ("Agreement") by and between MCN Energy Group
Inc., a Michigan corporation ("Company") and Xxxxxxx X. XxXxxxxxx ("Executive")
is made as of August 26, 1998 (the "Effective Date").
The Board of Directors of the Company ("Board") has determined that it is in the
best interest of the Company and its shareholders to assure that the Company
will have the continued dedication and expertise of the Executive beyond his
sixty-fifth birthday. The Board believes that retention of Xx. XxXxxxxxx is
critical in order to attain projected short-term and long-term financial goals
for of the Company. Therefore, in order to accomplish these objectives, the
Board has caused the Company to enter into this Agreement.
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1. Minimum Agreement Period. The Executive hereby agrees
to remain in the employ of the Company, in accordance with the terms and
provisions of this Agreement, for the period commencing on the Effective Date
and ending no earlier than December 31, 1999 (the "Minimum Agreement Period").
The Executive shall remain an at-will employee but shall be entitled to any
explicit vested payments provided in this Agreement.
2. Terms of Agreement. (a) Executive's Obligations.
During the Minimum Agreement Period, and excluding any periods of vacation and
sick leave to which the Executive is entitled, the Executive agrees to devote
reasonable attention and time during normal business hours to the business and
affairs of the Company and, to the extent necessary to discharge the
responsibilities assigned to the Executive hereunder, to use the Executive's
reasonable best efforts to perform faithfully and efficiently such
responsibilities. During the Minimum Agreement Period it shall not be a
violation of this Agreement for the Executive to (A) sit on corporate, civic or
charitable boards or committees, (B) deliver lectures, fulfill speaking
engagements or teach at educational institutions and (C) manage personal
investments, so long as such activities do not significantly interfere with the
performance of the Executive's responsibilities as an employee of the Company in
accordance with this Agreement. It is expressly understood and agreed that to
the extent any such activities have been conducted by the Executive prior to the
Effective Date, the continued conduct of such activities (or the conduct of
activities similar in nature and scope thereto) subsequent to the Effective Date
shall not thereafter be deemed to interfere with the performance of the
Executive's responsibilities to the Company.
1
2
(b) Award. The Executive shall be eligible for a lump-sum
payment of $400,000.
3. Termination of Employment. (a) Death. The Executive's
employment shall terminate immediately upon the Executive's death during the
term of this Agreement.
(b) Disability. The Executive's employment shall terminate
on the 30th day after receipt of notice from the Company that the Board has
determined the Executive to be disabled ("Disability Effective Date"). For
purposes of this Agreement, "Disability" shall mean the absence of the Executive
from the Executive's duties with the Company on a full-time basis for 180
consecutive business days as a result of incapacity due to mental or physical
illness which is determined to be total and permanent by a physician selected by
the Company or its insurers and acceptable to the Executive or the Executive's
legal representative; such agreement as to acceptability shall not be withheld
unreasonably.
(c) Cause. The Company may terminate this Agreement during
the Minimum Agreement Period for Cause. For purposes of this Agreement, "Cause"
shall mean
(i) repeated violations by the Executive of the Executive's
obligations under Section 2(a) (other than as a result of Disability) which are
demonstrably willful and deliberate on the Executive's part, which are committed
in bad faith or without reasonable belief that such violations are in the best
interests of the Company;
(ii) the commitment of malfeasance, embezzlement or fraud by
the Executive; or
(iii) the conviction of the Executive of a felony.
(d) Good Reason. The Executive's employment may by
terminated by the Executive for Good Reason. For purposes of this Agreement,
"Good Reason" shall mean
(i) the assignment to the Executive of any duties
inconsistent in any respect with the Executive's position (including status,
offices, titles and reporting requirements), authority, duties or
responsibilities held, exercised and assigned at any time during the 90-day
period immediately preceding the Effective Date, or any other action by the
Company which results in a diminution in such position, authority, duties or
responsibilities that a reasonable man holding a similar position would find
untenable, excluding for this purpose an isolated, insubstantial and inadvertent
action not taken in bad faith and which is remedied by the Company promptly
after receipt on notice thereof given by the Executive;
2
3
(ii) the Company's requiring the Executive to be based at
any office or location other than the location where the Executive was employed
immediately preceding the Effective Date ("Current Location") or any office
which is the headquarters of the Company and such office is more than 35 miles
from the Current Location; or
(iii) any purported termination by the Company of this
Agreement other than as expressly permitted by this Agreement.
(e) Notice of Termination. Any termination by the Company
for Cause, or by the Executive for Good Reason, shall be communicated by Notice
of Termination to the other party hereto given in accordance with Section 9(b).
For purposes of this Agreement, a "Notice of Termination" means a written notice
which
(i) indicates the specific termination provision in this
Agreement relied upon;
(ii) to the extent applicable, sets forth in reasonable
detail the facts and circumstances claimed to provide a basis for termination of
the Executive's employment under the provision so indicated; and
(iii) if the Date of Termination (as defined below) is other
than the date of receipt of such notice, specifies the termination date (which
date shall be not more than 15 days after the giving of such notice).
The failure by the Executive or the Company to set forth in the Notice of
Termination any fact or circumstance which contributes to a showing of Good
Reason or Cause shall not waive any right of the Executive or the Company
hereunder or preclude the Executive or the Company from asserting such fact or
circumstance in enforcing the Executive's or the Company's rights hereunder.
(f) Date of Termination. For purposes of this Agreement,
"Date of Termination" means
(i) if the Executive's employment is terminated by the
Company for Cause, or by the Executive for Good Reason, the date of receipt of
the Notice of Termination or any later date specified therein (which date shall
be not more than 15 days after the giving of such notice), as the case may be;
(ii) if the Executive's employment is terminated by the
Company other than for Cause or Disability, the Date of Termination shall be the
date on which the Company notifies the Executive of such termination; and
3
4
(iii) if the Executive's employment is terminated by reason
of death or Disability, the Date of Termination shall be the date of death of
the Executive or the Disability Effective Date, as the case may be.
4. Payment of Award. (a) Completion of Minimum Agreement
Period. If the Executive remains in the employ of the Company to the end of the
Minimum Agreement Period, the Award shall vest as of the end of such Minimum
Agreement Period. The Company shall deliver a check to the Executive within 30
days.
(b) Termination Due to Good Reason, Death or Disability.
If, during the Minimum Agreement Period, the Executive shall terminate
employment for Good Reason, the Company shall terminate the Executive's
employment other than for Cause, or the Executive's employment is terminated by
reason of the Executive's Death or Disability, this Agreement shall terminate
and the Award shall immediately vest and be paid to the Executive or his estate
or beneficiary, as applicable, within 30 days of the Date of Termination.
(c) Termination Due to Cause; Other than for Good Reason.
If the Company terminates the Executive's employment for Cause during the
Minimum Agreement Period, or if the Executive terminates employment during the
Minimum Agreement Period, other than a termination for Good Reason, this
Agreement shall terminate and the Executive shall forfeit any rights to the
Award specified in paragraph 2(b).
5. Non-exclusivity of Rights. Nothing in this Agreement
shall prevent or limit the Executive's continuing or future participation in any
plan, program, policy or practice provided by the Company or any of its
affiliated companies and for which the Executive may qualify, nor shall anything
herein limit or otherwise affect such rights as the Executive may have under any
contract or agreement with the Company or any of its affiliated companies.
Amounts which are vested benefits or which the Executive is otherwise entitled
to receive under any plan, policy, practice or program of, or any contract or
agreement with, the Company or any of its affiliated companies at or subsequent
to the Date of Termination shall be payable in accordance with such plan,
policy, practice or program or contract or agreement.
6. Full Settlement: Resolution of Disputes. (a) If there
shall be any dispute between the Company and the Executive (i) in the event of
any termination of the Executive's employment by the Company, whether such
termination was for Cause, or (ii) in the event of any termination of employment
by the Executive, whether Good Reason existed, then, unless and until there is a
final, nonappealable judgment by a court of competent jurisdiction declaring
that such termination was for Cause or that the determination by the Executive
of the existence of Good Reason was not made in good faith, the Award the
4
5
Company would be required to pay or provide pursuant to Section 4(b) if such
termination were by the Company without Cause or by the Executive with Good
Reason shall be held in abeyance. If it is ultimately adjudged by such court
that Cause existed or Good Reason did not exist, the Award held in abeyance
shall be immediately forfeited. If it is ultimately adjudged by such court that
Cause did not exist or Good Reason did exist, the Award, plus interest at 1.5%
per month, shall be paid to the Executive within 30 days of such judgement.
(b) The Company agrees to pay promptly as incurred, to the
full extent permitted by law, all legal fees and expenses which the Executive
may reasonably incur as a result of any contest (regardless of the outcome
thereof) by the Company, the Executive or others of the validity or
enforceability of, or liability under, any provision of this Agreement or any
guarantee of performance thereof (including as a result of any contest by the
Executive about the amount of any payment pursuant to this Agreement).
7. Confidential Information. The Executive shall hold in
a fiduciary capacity for the benefit of the Company all secret or confidential
information, knowledge or data relating to the Company or any of its affiliated
companies, and their respective businesses, which shall have been obtained by
the Executive during the Executive's employment by the Company or any of its
affiliated companies and which shall not be or become public knowledge (other
than by acts by the Executive or representatives of the Executive in violation
of this Agreement). After termination of the Executive's employment with the
Company, the Executive shall not, without the prior written consent of the
Company or as may otherwise be required by law or legal process, communicate or
divulge any such information, knowledge or data to anyone other than the Company
and those designated by it. In no event shall an asserted violation of the
provisions of this Section 7 constitute a basis for deferring or withholding any
amounts otherwise payable to the Executive under this Agreement.
8. Successors. (a) This Agreement is personal to the
Executive and without the prior written consent of the Company shall not be
assignable by the Executive otherwise than by will or the laws of descent and
distribution. This Agreement shall inure to the benefit of and be enforceable by
the Executive's legal representatives.
(b) This Agreement shall inure to the benefit of and be
binding upon the Company and its successors and assigns.
(c) The Company will require any successor (whether direct
or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to assume
expressly and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession
had taken place. As used in this Agreement, "Company" shall mean the
5
6
Company as hereinbefore defined and any successor to its business and/or assets
an aforesaid which assumes and agrees to perform this Agreement by operation of
law, or otherwise.
9. Miscellaneous. (a) This Agreement shall be governed by
and construed in accordance with the laws of the State of Michigan, without
reference to principles of conflict of laws. The captions of this Agreement are
not part of the provisions hereof and shall have no force or effect. This
Agreement may not be amended or modified otherwise than by a written agreement
executed by the parties hereto or their respective successors and legal
representatives.
(b) All notices and other communications hereunder shall be
in writing and shall be given by hand delivery to the other party or by
registered or certified mail, return receipt requested, postage prepaid,
addressed as follows:
If to the Executive:
At the most current address of record designated in the
Executive's personnel file
If to the Company:
MCN Energy Group Inc.
000 Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: General Counsel
or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.
(c) The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement.
(d) The Company may withhold from any amounts payable under
this Agreement such Federal, state or local taxes as shall be required to be
withhold pursuant to any applicable law or regulation.
(e) The Executive's or the Company's failure to insist upon
strict compliance with any provision hereof or ally other provision of this
Agreement or the failure to assert any right the Executive or the Company may
have hereunder, including, without
6
7
limitation, the right of the Executive to terminate employment for Good Reason
pursuant to Section 3(d)(i)-(iv), shall not be deemed to be a waiver of such
provision or right or any other provision or right of this Agreement.
(f) The Executive and the Company acknowledge that, except
as may otherwise be provided under any other written agreement between the
Executive and the Company, the employment of the Executive by the Company is "at
will" and, prior to the Effective Date, may be terminated by either the
Executive or the Company at any time. Moreover, if prior to the Effective Date,
the Executive's employment with the Company terminates, then the Executive shall
have no further rights under this Agreement.
(g) The Executive and the Company acknowledge that this
Agreement does not constitute a plan and is not subject to the Employee
Retirement Income Security Act of 1974, as amended (also known as "ERISA").
IN WITNESS WHEREOF, the Executive has hereunto set the
Executive's hand and, pursuant to the authorization from its Board of Directors,
the Company has caused these presents to be executed in its name on its behalf,
all as of the day and year first above written.
-----------------------------------
MCN Energy Group Inc.
By:
--------------------------------
7
