EXHIBIT 10(kk)
[COMPANY LETTERHEAD]
October 15, 2001
Xx. Xxxxxxx X. Xxxx
00000 Xxxxx Xxxxxx
Xxxxxx, XX 00000
Re: Retention Agreement
Dear Xxxxxxx:
As it is our belief that your continued employment with
Reliant Energy, Incorporated (the "Company") is important for the growth and
development of the Company, the Company hereby agrees to provide Xxxxxxx X. Xxxx
("you" or the "Executive") with the following benefits upon the occurrence of
certain events in connection with the anticipated sale of Texas Genco, as more
fully set forth below in this letter agreement (this "Agreement").
1. DEFINITIONS: For purposes of this Agreement, the following
terms will have the meanings indicated below:
"AFFILIATE" shall mean any company controlled by, controlling
or under common control with the Company within the meaning of Section 414 of
the Internal Revenue Code of 1986, as amended.
"CAUSE" shall mean termination of employment by the Company or
an Affiliate due to unacceptable performance, misconduct, gross negligence,
dishonesty, acts detrimental or destructive to the Company or its Affiliates,
employees or property, or any violation of the policies of the Company or its
Affiliates.
"COMPARABLE EMPLOYMENT" shall mean employment that (i)
provides annual base salary or annualized base rate of pay not less than the
Executive's Compensation, (ii) provides the opportunity to receive a bonus not
less than the Executive's target award under the AICP and (iii) is at a location
that is not more than 35 miles from the principal place of employment for the
Executive as of the Effective Date.
"COMPENSATION" shall mean the Executive's annual base salary
as of the date of his termination of employment with the Company.
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"DISABILITY" means disability as defined in the Company's Long
Term Disability Plan.
"EFFECTIVE DATE" shall mean October 15, 2001, the date of this
Agreement.
"RESTORATION PLAN" shall mean the Reliant Energy, Incorporated
Benefits Restoration Plan, as in effect from time to time, or any successor
plan.
"RETENTION PERIOD" shall mean the period commencing on the
Effective Date and ending on the earlier of (i) the Texas Genco Sale or (ii)
December 31, 2005.
"RETIREE MEDICAL PLAN" shall mean the Company's medical plan
in which retirees are eligible to participate, if any, as such medical plan may
be in effect from time to time.
"RETIREMENT PLAN" shall mean the Reliant Energy, Incorporated
Retirement Plan, as amended and restated effective January 1, 1999, and as
thereafter amended.
"SERVICE" shall mean Service as defined in the Retirement
Plan.
"SUPPLEMENTAL RETIREMENT BENEFIT" is defined in Section 2(a)
hereof.
"TEXAS GENCO" shall mean the entity owning the Texas
generating assets of the Company's electric utility division.
"TEXAS GENCO PURCHASER" shall mean any of the purchaser(s) or
transferee(s), as applicable, of Texas Genco in the Texas Genco Sale, or an
affiliate of or successor to such purchaser(s) or transferee(s).
"TEXAS GENCO SALE" shall mean the closing of a sale, long-term
lease or other disposition of the stock or substantially of the assets of Texas
Genco by the Company.
"WITHOUT CAUSE" shall mean without Cause and for reasons other
than death or Disability of the Executive.
2. SUPPLEMENTAL RETIREMENT BENEFIT.
(a) If (i) the Executive is terminated Without Cause prior to the
end of the Retention Period, (ii) the Executive dies while
employed by the Company prior to the end of the Retention
Period, or (iii) the Texas Genco Sale occurs, the Executive
remains employed through the Retention Period and either (A)
neither a Texas Genco Purchaser nor the Company provides the
Executive with a benefit equivalent to the Supplemental
Retirement Benefit, as defined below, or (B) the Executive is
not offered Comparable Employment with a Texas Genco Purchaser
or the Company or an Affiliate, then the Executive shall be
entitled to a supplemental retirement benefit equal in value
to the benefit that would have been payable to Executive in
accordance with Section 7.8 of the Retirement Plan if such
benefit
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formula was in effect with respect to the Executive as of the
date of Executive's termination of employment with the Company
(the "Supplemental Retirement Benefit"). Such Supplemental
Retirement Benefit shall be offset by the present value of any
transition benefit or other similar benefit provided by the
Company or an Affiliate pursuant to the Retirement Plan and/or
Restoration Plan, either in connection with the Texas Genco
Sale or otherwise, and/or any transition pension benefit or
similar benefit provided by the Texas Genco Purchaser.
(b) If Executive becomes entitled to receive the Supplemental
Retirement Benefit, such Supplemental Retirement Benefit will
be paid at the same time and in the same manner as the benefit
provided to the Executive pursuant to the terms of the
Restoration Plan.
3. RETIREE MEDICAL ELIGIBILITY: If (i) the Executive's
employment with the Company or an Affiliate is terminated Without Cause during
the Retention Period (and, in connection with his termination of employment, he
is not offered Comparable Employment with the Texas Genco Purchaser or the
Company or an Affiliate) or (ii) Executive is not offered Comparable Employment
with the Texas Genco Purchaser or the Company or an Affiliate in connection with
the Texas Genco Sale, then the Executive will be entitled to receive the
post-employment coverage outlined below. The post-employment coverage benefit is
as follows:
If the Executive has not reached age 55 as of the date of his
termination of employment with the Company and all Affiliates,
then, upon reaching age 55, he shall be entitled to
participate in the Company's retiree medical, dental and
vision plans, provided the Executive pays the required total
monthly price for the plans selected as in effect from time to
time.
4. RELEASE REQUIRED: Notwithstanding anything else in this
Agreement, the Executive will not be entitled to any of the benefits set forth
in Sections 2 or 3 hereof unless he executes (and does not revoke during any
statutory revocation period) a general waiver and release of claims against the
Company, its Affiliates, and any officer or director of the Company or its
Affiliates, in a form acceptable to the Company.
5. WITHHOLDING OF TAXES: The Company may withhold from any
benefits payable under this agreement all federal, state, city or other taxes as
may be required pursuant to any law or governmental regulation or ruling.
6. NO EMPLOYMENT AGREEMENT: Nothing in this agreement shall
give the Executive any rights to (or impose any obligations for) continued
employment by the Company or any Affiliate or subsidiary thereof or successor
thereto, nor shall it give such entities any rights (or impose any obligations)
with respect to continued performance of duties by the Executive.
7. NO ASSIGNMENT; SUCCESSORS: Executive's right to receive
payments or benefits hereunder shall not be assignable or transferable, whether
by pledge, creation of a security interest or otherwise, whether voluntary,
involuntary, by operation of law or otherwise, other than a transfer by will or
by the laws of descent or distribution, and in the event of any
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attempted assignment or transfer contrary to this Section 7 the Company shall
have no liability to pay any amount so attempted to be assigned or transferred.
This agreement shall inure to the benefit of and be enforceable by Executive's
personal or legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees.
This agreement shall be binding upon and inure to the benefit
of the Company, its successors and assigns, including, without limitation, any
company into or with which the Company may merge or consolidate by operation of
law or otherwise.
8. ENTIRE AGREEMENT: This agreement represents the entire
agreement between the Company and Executive with respect to the subject matter
hereof, and supersedes and is in full substitution for any and all prior
agreements or understandings, whether oral or written, relating to the subject
matter hereof.
9. MODIFICATION OF AGREEMENT. Any modification of this
agreement shall be binding only if evidenced in writing and signed by an
authorized representative of the Company.
10. APPLICABLE LAW: This agreement is entered into under, and
shall be governed for all purposes by, the laws of the State of Texas.
11. SEVERABILITY: If a court of competent jurisdiction
determines that any provision of this agreement is invalid or unenforceable,
then the invalidity or unenforceability of that provision shall not affect the
validity or enforceability of any other provision of this agreement and all
other provisions shall remain in full force and effect.
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If you agree to the terms of this letter agreement, please
sign and date below.
Yours very truly,
RELIANT ENERGY, INCORPORATED
By /s/ Xxxxx X. XxXxxxxxxx
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Xxxxx X. XxXxxxxxxx
Vice Chairman and President and
Chief Operating Officer,
Reliant Energy Delivery Group
Accepted and Agreed to By:
/s/ Xxxxxxx X. Xxxx
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Xxxxxxx X. Xxxx
31 Oct. 01
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Execution Date
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