Exhibit 10.4
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT ("Agreement") made and entered
into as of the 12th day of October, 1996, by and
between Mineral Energy Company (the
"Company"), a California corporation, and Xxxxxx X.
Xxxxxxxxx (the "Executive");
WHEREAS, the Executive is currently serving as
President and Chief Executive Officer of San Diego Gas
& Electric Company and Executive Vice President of
Enova, a California corporation ("Enova"), and the
Company desires to secure the continued employment of
the Executive in accordance herewith;
WHEREAS, pursuant to the Agreement and Plan of Merger
(the "Merger Agreement"), dated as of October 12, 1996,
among, inter alia, Enova, Pacific Enterprises, a
California corporation ("Pacific Enterprises") and the
Company, the parties thereto have agreed to a merger
(the "Merger") pursuant to the terms thereof;
WHEREAS, the Executive is willing to commit himself
to be employed by the Company on the terms and
conditions herein set forth and thus to forego
opportunities elsewhere; and
WHEREAS, the parties desire to enter into this
Agreement, as of the Effective Date (as hereinafter
defined), setting forth the terms and conditions for
the employment relationship of the Executive with the
Company during the Employment Period (as hereinafter
defined).
NOW, THEREFORE, IN CONSIDERATION of the mutual
premises, covenants and agreements set forth below, it
is hereby agreed as follows:
1. Employment and Term.
(a) Employment. The Company agrees to employ the
Executive, and the Executive agrees to be employed by
the Company, in accordance with the terms and
provisions of this Agreement during the term thereof
(as described below).
(b) Term. The term of the Executive's employment
under this Agreement shall commence (the "Effective
Date") as of the closing date (the "Closing Date") of
the Merger as described in the Merger Agreement and
shall continue until the earlier of the Executive's
Mandatory Retirement Age (as defined herein) or the
fifth anniversary of the Effective Date (such term
being referred to hereinafter as the "Employment
Period"); provided, however, that commencing on the
fourth anniversary of the Effective Date (and each
anniversary of the Effective Date thereafter), the term
of this Agreement shall automatically be extended for
one additional year, unless, prior to such date, the
Company or the Executive shall give written notice to
the other party that it or he, as the case may be, does
not wish to so extend this Agreement; and further
provided, however, that if the Merger Agreement is
terminated, then, at the time of such termination, this
Agreement shall be deemed cancelled and of no force or
effect and the Executive shall continue to be subject
to such agreements and arrangements that were in effect
prior to the Closing Date of the Merger. As a
condition to the Merger, the parties hereto agree that
the Company shall be responsible for all of the
premises, covenants and agreements set forth in this
Agreement.
(c)Mandatory Retirement. In no event shall the term
of the Executive's employment hereunder extend beyond
the end of the month in which the Executive's 65th
birthday occurs (the "Mandatory Retirement Age").
2. Duties and Powers of Executive.
(a) Position. During the period commencing on the
Effective Date the Executive shall serve as President
and Principal Executive Officer of the businesses of
the Company and its subsidiaries that are not
economically regulated by the California Public
Utilities Commission (the "Unregulated Subsidiaries")
with such authority, duties and responsibilities with
respect to such position as set forth in subsection (b)
hereof. In this capacity, the Executive shall report
to the Office of the Chairman or if the Office of the
Chairman does not exist, the Chief Executive Officer of
the Company. The titles, authority, duties and
responsibilities set forth in subsection (b) hereof may
be changed from time to time but only with the mutual
written agreement of the Executive and the Company.
(b)Duties of the President and Principal Executive
Officer. The duties of the President and Principal
Executive Officer of the Company's Unregulated
Subsidiaries shall include but not be limited to
directing the overall business, affairs and operations
of the Company's Unregulated Subsidiaries, through the
officers of such subsidiaries, all of whom shall report
directly or indirectly to the Executive.
(c) Attention. During the Employment Period, and
excluding any periods of vacation and sick leave to
which the Executive is entitled, the Executive shall
devote full 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 under this
Agreement, use the Executive's best efforts to carry
out such responsibilities faithfully and efficiently.
It shall not be considered a violation of the foregoing
for the Executive to serve on corporate, industry,
civic or charitable boards or committees, so long as
such activities do not interfere with the performance
of the Executive's responsibilities as an employee of
the Company in accordance with this Agreement.
3. Compensation.
It is the Board's intention to provide the Executive
with compensation opportunities that, in total, are at
a level that is consistent with that provided by
comparable companies to executives of similar levels of
responsibility, expertise and corporate and individual
performance as determined by the compensation committee
of the Board. In this regard, the Executive shall
receive the following compensation for his services
hereunder to the Company:
(a) Base Salary. During the Employment Period, the
Executive's annual base salary ("Annual Base Salary")
shall in no event be no less than $440,000 and shall be
payable in accordance with the Company's general
payroll practices. Subject to Section 4(d)(ii), the
Board in its discretion may from time to time direct
such upward adjustments in the Executive's Annual Base
Salary as the Board deems to be necessary or desirable,
including, without limitation, adjustments in order to
reflect increases in the cost of living and the
Executive's performance. Any increase in Annual Base
Salary shall not serve to limit or reduce any other
obligation of the Company under this Agreement.
(b) Incentive Compensation. Subject to Section
4(d)(ii), during the Employment Period, the Executive
shall participate in annual incentive compensation
plans and long-term incentive compensation plans of the
Company and, to the extent appropriate, the Company's
Subsidiaries (which long-term incentive compensation
plans may include plans offering stock options,
restricted stock and other long-term incentive
compensation and all such annual and long-term plans to
be hereinafter referred to as the "Incentive
Compensation Plans") and will be granted awards
thereunder providing him with the opportunity to earn,
on a year-by-year basis, annual and long-term incentive
compensation (the "Incentive Compensation Awards")at
least equal (in terms of target, maximum and minimum
awards expressed as a percentage of Annual Base Salary)
to the Executive's opportunities that were in effect
prior to the Effective Date. Any equity awards granted
to the Executive may be granted, at the Executive's
election, to trusts established for the benefit of
members of the Executive's family. With respect to
incentive compensation awards granted prior to the
Effective Date, the Executive shall be entitled to
retain such awards in accordance with their terms,
which shall be appropriately adjusted as a result of
the Merger.
(c) Retirement and Welfare Benefit Plans. In
addition to the benefits provided under Section 3(b),
during the Employment Period and so long as the
Executive is employed by the Company, he shall be
eligible to participate in all other savings,
retirement and welfare plans, practices, policies and
programs applicable generally to employees and/or
senior executive officers of the Company and its
domestic subsidiaries, except with respect to any
benefits under any plan, practice, policy or program to
which the Executive has waived his rights in writing.
To the extent that benefits payable or provided to the
Executive under such plans are materially less
favorable on a benefit by benefit basis than the
benefits that would have been payable or provided to
the Executive under comparable Enova tax-qualified
retirement plans, executive retirement plans, split
dollar and other life insurance arrangements in which
the Executive was a participant (based on the terms of
such plans as of the Effective Date), the Executive
shall be entitled to benefits pursuant to the terms of
this Agreement equal to the excess of the benefits
provided under the applicable Enova plans over the
benefits provided under the comparable Company plans.
(d) Expenses. The Company shall reimburse the
Executive for all expenses, including those for travel
and entertainment, properly incurred by him in the
performance of his duties hereunder in accordance with
policies established from time to time by the Board.
(e) Fringe Benefits and Perquisites. During the
Employment Period and so long as the Executive is
employed by the Company, he shall be entitled to
receive fringe benefits and perquisites in accordance
with the plans, practices, pro-grams and policies of
the Company and, to the extent appropriate, the
Company's subsidiaries from time to time in effect,
commensurate with his position.
4. Termination of Employment.
(a) Death or Disability. The Executive's employment
shall terminate upon the Executive's death or, at the
election of the Board or the Executive, by reason of
Disability (as herein defined) during the Employment
Period; provided, however, that the Board may not
terminate the Executive's employment hereunder by
reason of Disability unless at the time of such
termination there is no reasonable expectation that the
Executive will return to work within the next ninety
(90) day period. For purposes of this Agreement,
disability ("Disability") shall have the same meaning
as set forth in the Enova long-term disability plan or
its successor.
(b) By the Company for Cause. The Company may
terminate the Executive's employment during the
Employment Period for Cause (as herein defined). For
purposes of this Agreement, "Cause" shall mean (i) the
willful and continued failure by the Executive to
substantially perform the Executive's duties with the
Company (other than any such failure resulting from the
Executive's incapacity due to physical or mental
illness or any such actual or anticipated failure after
the issuance of a Notice of Termination for Good Reason
by the Executive pursuant to Section 4(d))or (ii) the
Executive's commission of one or more acts of moral
turpitude that constitute a violation of applicable law
(including but not limited to a felony) which have or
result in an adverse effect on the Company, monetarily
or otherwise or one or more significant acts of
dishonesty . For purposes of clause (i) of this
definition, no act, or failure to act, on the
Executive's part shall be deemed "willful" unless done,
or omitted to be done, by the Executive not in good
faith and without reasonable belief that the
Executive's act, or failure to act, was in the best
interest of the Company.
(c) By the Company without Cause. Notwithstanding
any other provision of this Agreement, the Company may
terminate the Executive's employment other than by a
termination for Cause during the Employment Period, but
only upon the affirmative vote of three-fourths (3/4)
of the membership of the Board.
(d) By the Executive for Good Reason. The Executive
may terminate his employment during the Employment
Period for Good Reason (as herein defined). For
purposes of this Agreement, "Good Reason" shall mean
the occurrence without the written consent of the
Executive of any one of the following acts by the
Company, or failures by the Company to act, unless such
act or failure to act is corrected prior to the Date of
Termination (as hereinafter defined) specified in the
Notice of Termination (as hereinafter defined) given in
respect thereof:
(i) an adverse change in the Executive's title,
authority, duties, responsibilities or reporting lines
as specified in Sections 2(a) and 2(b) of this
Agreement;
(ii) a reduction by the Company in (A) the
Executive's Annual Base Salary as in effect on the date
hereof or as the same may be in-creased from time to
time or (B) the Executive's aggregate annualized
compensation and benefits opportunities, except, in the
case of both (A) and (B), for across-the-board
reductions similarly affecting all executives (both of
the Company and of any Person (as hereinafter defined)
then in control of the Company) whose compensation is
directly determined by the compensation committee of
the Board (and the compensation committee of the board
of directors of any Person then in control of the
Company); provided that, the exception for across-the-
board reductions shall not apply following a Change in
Control (as hereinafter defined);
(iii) the relocation of the Executive's principal
place of employment to a location away from the
Company's headquarters or a substantial increase in the
Executive's business travel obligations outside of the
Southern California area as of the Effective Date,
other than any such increase that (A) arises in
connection with extraordinary business activities of
the Company and (B) is understood not to be part of the
Executive's regular duties with the Company; (iv) the
failure by the Company to pay to the Executive any
portion of the Executive's current compensation and
benefits or to pay to the Executive any portion of an
installment of deferred compensation under any deferred
compensation program of the Company within thirty (30)
days of the date such compensation is due;
(v) any purported termination of the Executive's
employment that is not effected pursuant to a Notice of
Termination satisfying the requirements of Section
4(f); for purposes of this Agreement, no such purported
termination shall be effective;
(vi) the failure by the Company to obtain a
satisfactory agreement from any successor of the
Company requiring such successor to assume and agree to
perform the Company's obligations under this Agreement,
as contemplated in Section 11; or
(vii) the failure by the Company to comply with any
material provision of this Agreement.
Following a Change in Control (as hereinafter
defined), the Executive's determination that an act or
failure to act constitutes Good Reason shall be
presumed to be valid unless such determination is
deemed to be unreasonable by an arbitrator. The
Executive's right to terminate the Executive's
employment for Good Reason shall not be affected by the
Executive's incapacity due to physical or mental
illness. The Executive's continued employment shall
not constitute consent to, or a waiver of rights with
respect to, any act or failure to act constituting Good
Reason hereunder.
(e)Change in Control.
Change in Control shall mean the occurrence of any of
the following events:
(i)Any Person is or becomes the Beneficial Owner,
directly or indirectly, of securities of the Company
(not including in the securities beneficially owned by
such Person any securities acquired directly from the
Company or its affiliates other than in connection with
the acquisition by the Company or its affiliates of a
business) representing twenty percent(20%) or more of
the combined voting power of the Company's then
outstanding securities; or
(ii) The following individuals cease for any reason
to constitute a majority of the number of directors
then serving: individuals who, on the date hereof,
constitute the Board and any new director (other than a
director whose initial assumption of office is in
connection with an actual or threatened election
contest, including but not limited to a consent
solicitation, relating to the election of directors of
the Company) whose appointment or election by the Board
or nomination for election by the Company's share-
holders was approved or recommended by a vote of at
least two-thirds (2/3) of the directors then still in
office who either were directors on the date hereof or
whose appointment, election or nomination for election
was previously so approved or recommended; or
(iii) There is consummated a merger or consolidation
of the Company or any direct or indirect subsidiary of
the Company with any other corporation, other than (A)
a merger or consolidation which would result in the
voting securities of the Company outstanding
immediately prior to such merger or consolidation
continuing to represent (either by remaining
outstanding or by being converted into voting
securities of the surviving entity or any parent
thereof), in combination with the ownership of any
trustee or other fiduciary holding securities under an
employee benefit plan of the Company or any subsidiary
of the Company, at least sixty percent (60%) of the
combined voting power of the securities of the Company
or such surviving entity or any parent thereof
outstanding immediately after such merger or
consolidation, or(B) a merger or consolidation effected
to implement a recapitalization of the Company (or
similar transaction) in which no Person is or becomes
the beneficial owner, directly or indirectly, of
securities of the Company (not including in the
securities beneficially owned by such Person any
securities acquired directly from the Company or its
affiliates other than in connection with the
acquisition by the Company or its affiliates of a
business) representing twenty percent (20%) or more of
the combined voting power of the Company's then
outstanding securities; or
(iv) The shareholders of the Company approve a plan
of complete liquidation or dissolution of the Company
or there is consummated an agreement for the sale or
disposition by the Company of all or substantially all
of the Company's assets, other than a sale or
disposition by the Company of all or substantially all
of the Company's assets to an entity, at least sixty
percent (60%) of the combined voting power of the
voting securities of which are owned by shareholders of
the Company in substantially the same proportions as
their ownership of the Company immediately prior to
such sale.
"Person" shall have the meaning given in Section
3(a)(9) of the Securities Exchange Act of 1934 (the
"Exchange Act"), as modified and used in Sections 13(d)
and 14(d) thereof, except that such term shall not
include (i) the Company or any of its subsidiaries,
(ii) a trustee or other fiduciary holding securities
under an employee benefit plan of the Company or any of
its affiliates, (iii) an underwriter temporarily
holding securities pursuant to an offering of such
securities,(iv) a corporation owned, directly or
indirectly, by the shareholders of the Company in
substantially the same proportions as their ownership
of stock of the Company, or(v) a person or group as
used in Rule 13d-1(b) under the Exchange Act.
"Beneficial Owner" shall have the meaning set forth in
Rule 13d-3 under the Exchange Act.
Notwithstanding the foregoing, any event or
transaction which would otherwise constitute a Change
in Control (a "Transaction") shall not constitute a
Change in Control for purposes of this Agreement if, in
connection with the Transaction, the Executive
participates as an equity investor in the acquiring
entity or any of its affiliates (the "Acquiror"). For
purposes of the preceding sentence, the Executive shall
not be deemed to have participated as an equity
investor in the Acquiror by virtue of (i) obtaining
beneficial ownership of any equity interest in the
Acquiror as a result of the grant to the Executive of
an incentive compensation award under one or more
incentive plans of the Acquiror (including, but not
limited to, the conversion in connection with the
Transaction of incentive compensation awards of the
Company into incentive compensation awards of the
Acquiror), on terms and conditions substantially
equivalent to those applicable to other executives of
the Company immediately prior to the Transaction, after
taking into account normal differences attributable to
job responsibilities, title and the like, (ii)
obtaining beneficial ownership of any equity interest
in the Acquiror on terms and conditions substantially
equivalent to those obtained in the Transaction by all
other shareholders of the Company, or (iii) obtaining
beneficial ownership of any equity interest in the
Acquiror in a manner unrelated to a Transaction.
(f) Notice of Termination. During the Employment
Period, any purported termination of the Executive's
employment (other than by reason of death)shall be
communicated by written Notice of Termination from one
party hereto to the other party hereto in accordance
with Section 12(b). For purposes of this Agreement, a
"Notice of Termination" shall mean a notice that shall
indicate the specific termination provision in this
Agreement relied upon, if any, and shall set 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. Further,
a Notice of Termination for Cause is required to
include a copy of a resolution duly adopted by the
affirmative vote of not less than three-fourths (3/4)
of the entire membership of the Board at a meeting of
the Board that was called and held no more than ninety
(90)days after the date the Board had knowledge of the
most recent act or omission giving rise to such breach
for the purpose of considering such termination (after
reasonable notice to the Executive and an opportunity
for the Executive, together with the Executive's
counsel, to be heard before the Board and, if possible,
to cure the breach that was the basis for the Notice of
Termination for Cause) finding that, in the good faith
opinion of the Board, the Executive was guilty of
conduct set forth in clause (i)or (ii) of the
definition of Cause herein, and specifying the
particulars thereof in detail. Unless the Board
determines otherwise, a Notice of Termination by the
Executive alleging a termination for Good Reason must
be made within 180 days of the act or failure to act
that the Executive alleges to constitute Good Reason.
(g) Date of Termination. "Date of Termination," with
respect to any purported termination of the Executive's
employment during the Employment Period, shall mean the
date specified in the Notice of Termination (which, in
the case of a termination by the Company, shall not be
less than thirty (30) days for reasons other than cause
and, in the case of a termination by the Executive,
shall not be less than fifteen (15) days nor more than
sixty (60) days) from the date such Notice of
Termination is given.
5. Obligations of the Company Upon Termination.
(a) Termination Other Than for Cause, Death or
Disability. During the Employment Period, if the
Company shall terminate the Executive's
employment(other than for Cause, death or Disability)
or the Executive shall terminate his employment for
Good Reason (termination in any such case being
referred to as "Termination") the Company shall pay to
the Executive amounts, and provide the Executive with
the benefits, described in this Section 5 (hereinafter
referred to as the "Severance Payments"). Subject to
Section 5(g), the amounts specified in this Section
5(a) shall be paid within thirty (30) days after the
Date of Termination.
(i) Lump Sum Payment. In lieu of any further
payments of Annual Base Salary or annual Incentive
Compensation Awards to the Executive for periods
subsequent to the Date of Termination, the Company
shall pay to the Executive a lump sum amount in cash
equal to the product of (X) the sum of (A) the
Executive's Annual Base Salary and (B) the greater of
the Executive's target bonus for the year of
termination or the average of the three(3) years'
highest gross bonus awards, not necessarily
consecutive, paid by the Company (or its predecessor)
to the Executive in the five (5) years preceding the
year of termination and (Y) the number of years
remaining in the Employment Period (including
fractional years) but in no event less than two
(2),provided, however, that in the event of a
Termination following a Change in Control such
multiplier shall not be less than three (3).
(ii) Accrued Obligations. The Company shall pay the
Executive a lump sum amount in cash equal to the sum of
(A) the Executive's Annual Base Salary through the Date
of Termination to the extent not thereto-fore paid, (B)
an amount equivalent to any annual Incentive
Compensation Awards earned with respect to fiscal years
ended prior to the year that includes the Date of
Termination to the extent not theretofore paid, and (C)
an amount equivalent to the target amount payable under
any annual Incentive Compensation Awards for the fiscal
year that includes the Date of Termination or, if
greater, the average of the three (3) years' highest
gross bonus awards, not necessarily consecutive, paid
by the Company (or its predecessor) to the Executive in
the five (5) years preceding the year of Termination
multiplied by a fraction the numerator of which shall
be the number of days from the beginning of such fiscal
year to and including the Date of Termination and the
denominator of which shall be 365, in each case to the
extent not theretofore paid. (The amounts specified in
clauses (A), (B) and (C) shall be hereinafter referred
to as the "Accrued Obligations.")
(iii) Deferred Compensation. In the event of a
Termination following a Change in Control, the Company
shall pay the Executive a lump sum payment in an amount
equal to any compensation previously deferred by the
Executive (together with any accrued interest or
earnings thereon).
(iv) Pension Supplement. The Company shall provide
the Executive with such additional years of age and
service credit for purposes of the calculation of
retirement benefits under the Enova Supplemental
Executive Retirement Plan (the "Enova SERP") as if he
had remained employed for the remainder of the
Employment Period, but in no event less than two (2)
years, provided, however, that (A) if the Executive has
not yet then attained age 53 at the time the credit for
age and service is given, he will be credited with the
additional amount of age credit as if he had attained
age 55 and (B) there shall be no reduction under the
Enova SERP for early retirement as set forth in
Paragraph 4.a.ii of the Enova SERP, except for the
early retirement reduction factor as determined in
accordance with the table in Section 5.4 of the San
Diego Gas & Electric Company Pension Plan, as adopted
by Enova (the "Pension Plan"), which factors shall be
applied to the Executive's age and years of service
after he is credited with the additional age and
service described above; and provided, further,
however, that in the event of a Termination following a
Change in Control, the Company shall pay the Executive
a lump sum payment in an amount equal to the benefits
under the Enova SERP as described in paragraph 2.c of
the Enova SERP, less the value calculated consistently
with paragraph 4.b of the SERP of the Executive's
entitlement under the Pension Plan, such payment to be
calculated and paid without regard to the limitation
described in the Enova SERP relating to Section 280G of
the Code and with such additional years of age and
service credit as if he had remained employed for the
remainder of the Employment Period, but in no event
less than two (2)years, provided that if he has not
then attained age 53 at the time the credit forage and
service is given, he will be credited with the
additional amount of age credit as if he had attained
age 55; and in either case the Executive's termination
shall be a "Qualifying Termination" as defined in the
Split Dollar Life Insurance Agreement entered into
between the Executive and Enova, and where necessary
the Company shall take such steps, including the
payment of additional premiums, as may be necessary so
that the cash value of the policy as of the Date of
Termination shall reflect the additional age and
service credit.
(v) Accelerated Vesting and Payment of Long-Term
Incentive Awards. All equity-based long-term Incentive
Compensation Awards held by the Executive under any
long- term Incentive Compensation Plan maintained by
the Company or any affiliate shall immediately vest and
become exercisable as of the Date of Termination, to be
exercised in accordance with the terms of the
applicable plan and award agreement; provided, however,
that any such awards granted on or after the Effective
Date shall remain outstanding and exercisable until the
earlier of (A) eighteen (18) months following the Date
of Termination or (B) the expiration of the original
term of such award (it being understood that all awards
granted prior to the Effective Date shall remain
outstanding and exercisable for a period that is no
less than that provided for in the applicable agreement
in effect as of the date of grant), and the Company
shall pay to the Executive, with respect to all cash-
based, long-term Incentive Compensation Awards made to
the Executive that are outstanding under any long-term
Incentive Compensation Plan maintained by the Company
or any affiliate an amount equal to the target amount
payable under such long-term Incentive Compensation
Awards multiplied by a fraction, the numerator of which
shall be the number of days from the beginning of the
award cycle to and including the Date of Termination,
and the denominator of which shall be the number of
days in the cycle as originally granted.
(vi) Continuation of Welfare Benefits. For (A) the
remainder of the Employment Period, but in no event
less than a period of two (2) years or (B) until the
Executive is eligible for retiree medical benefits,
whichever is longer, immediately following the Date of
Termination, the Company shall arrange to provide the
Executive and his dependents with life, disability,
accident and health insurance benefits substantially
similar to those provided to the Executive and his
dependents immediately prior to the Date of
Termination, provided, however, that if the Executive
becomes employed with another employer and is eligible
to receive life, disability, accident and health
insurance benefits under another employer-provided
plan, the benefits under the Company's plans shall be
secondary to those provided under such other plan
during such applicable period of eligibility, and
further provided, however, that in the event of a
Termination following a Change in Control such period
shall not be less than the number of years until the
Executive reaches normal retirement age as defined
under the Enova tax-qualified plans.
(b) Termination by the Company for Cause or by the
Executive Other than for Good Reason. Subject to the
provisions of Section 6 of this Agreement, if the
Executive's employment shall be terminated for Cause
during the Employment Period, or if the Executive
terminates employment during the Employment Period
other than for Good Reason, the Company shall have no
further obligations to The Executive under this
Agreement other than the Accrued Obligations.
(c) Termination due to Death or Disability. If the
Executive's employment shall terminate by reason of
death or Disability, the Company shall pay The
Executive or his estate, as the case may be, the
Accrued Obligations and, solely in the case of
Termination by reason of Disability, the Pension
Supplement. Such payments shall be in addition to
those rights and benefits to which the Executive or his
estate may be entitled under the relevant Company plans
or programs.
(d) Code Section 280G.
(i) Notwithstanding any other provisions of this
Agreement, in the event that any payment or benefit
received or to be received by the Executive (whether
pursuant to the terms of this Agreement or any other
plan, arrangement or agreement with (A) the Company,
(B) any Person (as defined in Section 4(e)) whose
actions result in a Change in Control or (C) any Person
affiliated with the Company or such Person) (all such
payments and benefits, including the Severance
Payments, being hereinafter called "Total
Payments")would not be deductible (in whole or part) by
the Company, an affiliate or Person making such payment
or providing such benefit as a result of section 280G
of the Code, then, to the extent necessary to make such
portion of the Total Payments deductible (and after
taking into account any reduction in the Total Payments
provided by reason of section 280G of the Code in such
other plan, arrangement or agreement), the cash
Severance Payments shall first be reduced (if
necessary, to zero), and all other Severance Payments
shall thereafter be reduced (if necessary, to zero);
provided, however, that the Executive may elect to have
the noncash Severance Payments reduced (or eliminated)
prior to any reduction of the cash Severance Payments.
(ii) For purposes of this limitation, (A) no portion
of the Total Payments the receipt or enjoyment of which
the Executive shall have waived at such time and in
such manner as not to constitute a "payment" within the
meaning of section 280G(b) of the Code shall be taken
into account, (B) no portion of the Total Payments
shall be taken into account which, in the opinion of
tax counsel ("Tax Counsel") reasonably acceptable to
the Executive and selected by the Company's accounting
firm which (or, in the case of a payment following a
Change in Control the accounting firm that was,
immediately prior to the Change in Control, the
Company's independent auditor) (the "Auditor"),does not
constitute a "parachute payment" within the meaning of
section 280G(b)(2) of the Code, including by reason of
section 280G(b)(4)(A) of the Code, (C) the Severance
Payments shall be reduced only to the extent necessary
so that the Total Payments (other than those referred
to in clause (A) or(B)) in their entirety constitute
reasonable compensation for services actually rendered
within the meaning of section 280G(b)(4)(B) of the Code
or are otherwise not subject to disallowance as
deductions by reason of section 280G of the Code, in
the opinion of Tax Counsel, and (D) the value of any
noncash benefit or any deferred payment or benefit
included in the Total Payments shall be determined by
the Auditor in accordance with the principles of
sections 280G(d)(3) and (4) of the Code.
(e) Consulting and Non-Competition. If the Total
Payments are subject to reduction in accordance with
the above provisions of Section 5(d), the Executive
shall have the option, to be exercised within ten (10)
days after receipt of notice of such reduction from the
Company, to enter into a consulting and non-competition
agreement with the Company (the "Consulting and Non-
Competition Agreement"), which shall (1) provide the
Executive with payments and benefits, payable over the
term of the agreement, the present value of which in
the aggregate is equal to or greater than the present
value (determined by applying a discount rate equal to
the interest rate provided in section 1274(b)(2)(B) of
the Code) of the balance of the payments and benefits
otherwise payable to the Executive without regard to
the provisions of Section 5(d), (2) require the
Executive to make his services available to the Company
for no more than twenty (20) hours per month and (3)
last for a period of not more than two (2) years
(unless the Executive consents to a longer period).
(f) Gross-Up Payment. In the event that the
Executive receives a notice from the Internal Revenue
Service to the effect that the amounts payable under
the Consulting and Non-Competition Agreement would be
subject (in whole or part)to the tax (the "Excise Tax")
imposed under section 4999 of the Code, within
thirty(30) days after the date the Chairman of the
Board receives a copy of such notice the Company shall
pay to the Executive such additional amounts (the
"Gross-Up Payment") such that the net amount retained
by the Executive, after deduction of any Excise Tax on
the Total Payments and any federal, state and local
income and employment taxes and Excise Tax upon the
Gross-Up Payment, shall be equal to the Total Payments.
For purposes of determining the amount of the Gross-Up
Payment, the Executive shall be deemed to pay federal
income tax at the highest marginal rate of federal
income taxation in the calendar year in which the
Gross-Up Payment is to be made and state and local
income taxes at the highest marginal rate of taxation
in the state and locality of the Executive's residence
on the date on which the Gross-Up Payment is calculated
for purposes of this section, net of the maximum
reduction in federal income taxes which could be
obtained from deduction of such state and local taxes.
In the event that the Excise Tax is subsequently
determined to be less than the amount taken into
account hereunder, the Executive shall repay to the
Company, at the time that the amount of such reduction
in Excise Tax is finally determined, the portion of the
Gross-Up Payment attributable to such reduction (plus
that portion of the Gross-Up Payment attributable to
the Excise Tax and federal, state and local income tax
imposed on the Gross-Up Payment being repaid by the
Executive to the extent that such repayment results in
a reduction in Excise Tax and/or a federal, state or
local income tax deduction) plus interest on the amount
of such repayment at the rate provided in section
1274(b)(2)(B) of the Code. In the event that the
Excise Taxis determined to exceed the amount taken into
account hereunder (including by reason of any payment
the existence or amount of which cannot be determined
at the time of the Gross-Up Payment), the Company shall
make an additional Gross-Up Payment in respect of such
excess (plus any interest, penalties or additions
payable by the Executive with respect to such excess)
at the time that the amount of such excess is finally
determined. The Executive and the Company shall each
reasonably cooperate with the other in connection with
any administrative or judicial proceedings concerning
the existence or amount of liability for Excise Tax
with respect to the Total Payments.
(g) Release. Notwithstanding anything herein to the
contrary, the Company's obligation to make the payments
provided for in this Section 5 is expressly made
subject to and conditioned upon (i) the Executive's
prior execution of a release substantially in the form
attached hereto as Exhibit A within forty-five (45)days
after the applicable Date of Termination and (ii) the
Executive's non-revocation of such release in
accordance with the terms thereof.
6. Nonexclusivity of Rights.
Nothing in this Agreement shall prevent or limit the
Executive's continuing or future participation in any
benefit, plan, program, policy or practice provided by
the Company and for which the Executive may qualify
(except with respect to any benefit to which the
Executive has waived his rights in writing), nor shall
anything herein limit or otherwise affect such rights
as the Executive may have under any other contract or
agreement entered into after the Effective Date with
the Company. Amounts which are vested benefits or
which the Executive is otherwise entitled to receive
under any benefit, plan, policy, practice or program
of, or any contract or agreement entered into with, the
Company shall be payable in accordance with such
benefit, plan, policy, practice or program or contract
or agreement except as explicitly modified by this
Agreement.
7. Full Settlement; Mitigation.
The Company's obligation to make the payments
provided for in this Agreement and otherwise to perform
its obligations hereunder shall not be affected by any
set-off, counterclaim, recoupment, defense or other
claim, right or action which the Company may have
against the Executive or others, provided that nothing
herein shall preclude the Company from separately
pursuing recovery from the Executive based on any such
claim. In no event shall the Executive be obligated to
seek other employment or take any other action by way
of mitigation of the amounts (including amounts for
damages for breach) payable to the Executive under any
of the provisions of this Agreement and such amounts
shall not be reduced whether or not the Executive
obtains other employment.
8. Arbitration.
Any dispute about the validity, interpretation, effect
or alleged violation of this Agreement (an "arbitrable
dispute") must be submitted to confidential arbitration
in San Diego, California. Arbitration shall take place
before an experienced employment arbitrator licensed to
practice law in such state and selected in accordance
with the Model Employment Arbitration Procedures of the
American Arbitration Association. Arbitration shall be
the exclusive remedy of any arbitrable dispute. Should
any party to this Agreement pursue any arbitrable
dispute by any method other than arbitration, the other
party shall be entitled to recover from the party
initiating the use of such method all damages, costs,
expenses and attorneys' fees incurred as a result of
the use of such method. Notwithstanding anything
herein to the contrary, nothing in this Agreement shall
purport to waive or in any way limit the right of any
party to seek to enforce any judgment or decision on an
arbitrable dispute in a court of competent
jurisdiction.
9. Confidentiality.
The Executive acknowledges that in the course of his
employment with the Company he has acquired non-public
privileged or confidential information and trade
secrets concerning the operations, future plans and
methods of doing business("Proprietary Information") of
the Company, its subsidiaries and affiliates; and the
Executive agrees that it would be extremely damaging to
the Company, its subsidiaries and affiliates if such
Proprietary Information were disclosed to a competitor
of the Company, its subsidiaries and affiliates or to
any other person or corporation. The Executive
understands and agrees that all Proprietary Information
has been divulged to the Executive in confidence and
further understands and agrees to keep all Proprietary
Information secret and confidential (except for such
information which is or becomes publicly available
other than as a result of a breach by the Executive of
this provision) without limitation in time. In view of
the nature of the Executive's employment and the
Proprietary Information the Executive has acquired
during the course of such employment, the Executive
likewise agrees that the Company, its subsidiaries and
affiliates would be irreparably harmed by any
disclosure of Proprietary Information in violation of
the terms of this paragraph and that the Company, its
subsidiaries and affiliates shall therefore be entitled
to preliminary and/or permanent injunctive relief
prohibiting the Executive from engaging in any activity
or threatened activity in violation of the terms of
this paragraph and to any other relief available to
them. Inquiries regarding whether specific information
constitutes Proprietary Information shall be directed
to the Company's Senior Vice President, Public
Policy(or, if such position is vacant, the Company's
Chief Executive Officer), provided, that the Company
shall not unreasonably classify information as
Proprietary Information.
10. Non-Solicitation of Employees.
The Executive recognizes that he possesses and will
possess confidential information about other employees
of the Company, its subsidiaries and affiliates
relating to their education, experience, skills,
abilities, compensation and benefits, and inter-
personal relationships with customers of the Company,
its subsidiaries and affiliates. The Executive
recognizes that the information he possesses and will
possess about these other employees is not generally
known, is of substantial value to the Company, its
subsidiaries and affiliates in developing their
business and in securing and retaining customers, and
has been and will be acquired by him because of his
business position with the Company, its subsidiaries
and affiliates. The Executive agrees that, during the
Employment Period and for a period of one (1) year
thereafter, he will not, directly or indirectly,
solicit or recruit any employee of the Company, its
subsidiaries or affiliates for the purpose of being
employed by him or by any competitor of the Company,
its subsidiaries or affiliates on whose behalf he is
acting as an agent, representative or employee and that
he will not convey any such confidential information or
trade secrets about other employees of the Company, its
subsidiaries and affiliates to any other person;
provided, however, that it shall not constitute a
solicitation or recruitment of employment in violation
of this paragraph to discuss employment opportunities
with any employee of the Company, its subsidiaries or
affiliates who has either first contacted the Executive
or regarding whose employment the Executive has
discussed with and received the written approval of the
Company's Vice President, Human Resources (or, if such
position is vacant, the Company's Chief Executive
Officer), prior to making such solicitation or
recruitment. In view of the nature of the Executive's
employment with the Company, the Executive likewise
agrees that the Company, its subsidiaries and
affiliates would be irreparably harmed by any
solicitation or recruitment in violation of the terms
of this paragraph and that the Company, its
subsidiaries and affiliates shall therefore be entitled
to preliminary and/or permanent injunctive relief
prohibiting the Executive from engaging in any activity
or threatened activity in violation of the terms of
this paragraph and to any other relief available to
them.
11. Legal Fees.
The Company shall pay to the Executive all legal fees
and expenses(including but not limited to fees and
expenses in connection with any arbitration)incurred by
the Executive in disputing in good faith any issue
arising under this Agreement relating to the
termination of the Executive's employment or in seeking
in good faith to obtain or enforce any benefit or right
provided by this Agreement, but in each case only to
the extent the arbitrator or court determines that the
Executive had a reasonable basis for such claim.
12. Successors.
(a) Assignment by Executive. This Agreement is
personal to The Executive and without the prior written
consent of the Company shall not be assign-able 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) Successors and Assigns of Company. This
Agreement shall inure to the benefit of and be binding
upon the Company, its successors and assigns. (c)
Assumption. The Company shall 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 Company as hereinbefore defined and any
successor to its businesses and/or assets as aforesaid
that assumes and agrees to perform this Agreement by
operation of law or otherwise.
13. Miscellaneous.
(a) Governing Law. This Agreement shall be governed
by and construed in accordance with the laws of the
State of California, without reference to its
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, modified, repealed, waived, extended or
discharged except by an agreement in writing signed by
the party against whom enforcement of such amendment,
modification, repeal, waiver, extension or discharge is
sought. No person, other than pursuant to a resolution
of the Board or a committee thereof, shall have
authority on behalf of the Company to agree to amend,
modify, repeal, waive, extend or discharge any
provision of this Agreement or anything in reference
thereto.
(b) Notices. 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, in either case, to the Company's
headquarters or to such other address as either party
shall have furnished to the other in writing in
accordance herewith. Notices and communications shall
be effective when actually received by the addressee.
(c) Severability. 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) Taxes. The Company may withhold from any
amounts payable under this Agreement such federal,
state or local taxes as shall be required to be
withheld pursuant to any applicable law or regulation.
(e) No Waiver. The Executive's or the Company's
failure to insist upon strict compliance with any
provision hereof or any other provision of this
Agreement or the failure to assert any right the
Executive or the Company may have hereunder, including,
without limitation, the right of the Executive to
terminate employment for Good Reason pursuant to
Section 4(d) of this Agreement, or the right of the
Company to terminate the Executive's employment for
Cause pursuant to Section 4(b) of this Agreement shall
not be deemed to be a waiver of such provision or right
or any other provision or right of this Agreement.
(f) Entire Agreement. This instrument contains the
entire agreement of the Executive, the Company or any
predecessor or subsidiary thereof with respect to the
subject matter hereof, and all promises,
representations, understandings, arrangements and prior
agreements are merged herein and superseded hereby
including, but not limited to, that certain employment
agreement dated September 18, 1996 between the
Executive and Enova. Notwithstanding the foregoing,
the provisions of any employee benefit or compensation
plan, program or arrangement applicable to the
Executive, including that certain Incentive Bonus
Agreement, entered into between the Executive and
Enova, shall remain in effect, except as expressly
otherwise provided herein.
IN WITNESS WHEREOF, the Executive and, pursuant to
due authorization from its Board of Directors, the
Company have caused this Agreement to be executed as of
the day and year first above written.
MINERAL ENERGY COMPANY
__________________________
Xxxxx X. Xxxxxx
President
__________________________
Xxxxxx X. Xxxxxxxxx
EXHIBIT A
GENERAL RELEASE
This GENERAL RELEASE (the "Agreement"), dated _______,
is made by and between ___________________, a
California corporation (the "Company") and
_____________ ("you" or "your").
WHEREAS, you and the Company have previously entered
into that certain Employment Agreement dated
_____________, 1996 (the "Employment Agreement"); and
WHEREAS, Section 5 of the Employment Agreement
provides for the payment of severance benefits in the
event of the termination of your employment under
certain circumstances, subject to and conditioned upon
your execution and non-revocation of a general release
of claims by you against the Company and its
subsidiaries and affiliates.
NOW, THEREFORE, in consideration of the premises and
the mutual covenants herein contained, you and the
Company hereby agree as follows:
ONE: Your signing of this Agreement confirms that
your employment with the Company shall terminate at the
close of business on ___________,or earlier upon our
mutual agreement.
TWO: As a material inducement for the payment of
benefits under Section 5 of that certain Employment
Agreement between you and the Company, and except as
otherwise provided in this Agreement, you and the
Company hereby irrevocably and unconditionally release,
acquit and forever discharge the other from any and all
Claims either may have against the other. For purposes
of his Agreement and the preceding sentence, the words
"Releasee" or "Releasees"
and "Claim" or "Claims," shall have the meanings set
forth below:
(a)The words "Releasee" or "Releasees" shall refer
to the you and to the Company and each of the Company's
owners, stockholders, predecessors, successors,
assigns, agents, directors, officers, employees,
representatives, attorneys, advisors, parent companies,
divisions, subsidiaries, affiliates(and agents,
directors, officers, employees, representatives,
attorneys and advisors of such parent companies,
divisions, subsidiaries and affiliates), and all
persons acting by, through, under or in concert with
any of them.
(b)The words "Claim" or "Claims" shall refer to any
charges, complaints, claims, liabilities, obligations,
promises, agreements, controversies, damages, actions,
causes of action, suits, rights, demands, costs,
losses, debts and expenses (including attorneys' fees
and costs actually incurred)of any nature whatsoever,
known or unknown, suspected or unsuspected, which you
or the Company now, in the past or, except as limited
by law or regulation such as the Age Discrimination in
Employment Act (ADEA), in the future may have, own or
hold against any of the Releasees; provided, however,
that the word "Claim" or "Claims" shall not refer to
any charges, complaints, claims, liabilities,
obligations, promises, agreements, controversies,
damages, actions, causes of action, suits, rights,
demands, costs, losses, debts and expenses (including
attorneys' fees and costs actually incurred) arising
under [identify severance, employee benefits, stock
option and other agreements containing duties, rights
obligations etc. of either party that are to remain
operative]. Claims released pursuant to this Agreement
by you and the Company include, but are not limited to,
rights arising out of alleged violations of any
contracts, express or implied, any tort, any claim that
you failed to perform or negligently performed or
breached your duties during employment at the Company,
any legal restrictions on the Company's right to
terminate employees or any federal, state or other
governmental statute, regulation, or ordinance,
including, without limitation: (1) Title VII of the
Civil Rights Act of l964 (race, color, religion, sex
and national origin discrimination); (2) 42 U.S.C Sec
1981 (discrimination); (3) 29 U.S.C. Sec 621-634(age
discrimination); (4) 29 U.S.C. Sec 206(d)(l) (equal
pay); (5) 42 U.S.C. Sec 12101, et seq. (disability);
(6) the California Constitution, Article I, Section
8(discrimination); (7) the California Fair Employment
and Housing Act (discrimination, including race, color,
national origin, ancestry, physical handicap, medical
condition, marital status, religion, sex or age); (8)
California Labor Code Section 1102.1 (sexual
orientation discrimination); (9) Executive Order
11246(race, color, religion, sex and national origin
discrimination); (10) Executive Order 11141 (age
discrimination); (11) Sec 503 and 504 of the
Rehabilitation Act of 1973 (handicap discrimination);
(12) The Worker Adjustment and Retraining Act (WARN
Act); (13) the California Labor Code (wages, hours,
working conditions, benefits and other matters); (14)
the Fair Labor Standards Act (wages, hours, working
conditions and other matters); the Federal Employee
Polygraph Protection Act (prohibits employer from
requiring employee to take polygraph test as condition
of employment); and (15) any federal, state or other
governmental statute, regulation or ordinance which is
similar to any of the statutes de-scribed in clauses
(1) through (14).
THREE: You and the Company expressly waive and
relinquish all rights and benefits afforded by any
statute (including but not limited to Section 1542 of
the Civil Code of the State of California) which limits
the effect of are lease with respect to unknown claims.
You and the Company do so under-standing and
acknowledging the significance of the release of
unknown claims and the waiver of statutory protection
against a release of unknown claims(including but not
limited to Section 1542). Section 1542 of the Civil
Code of the State of California states as follows:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE
CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR
AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY
HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH
THE DEBTOR."
Thus, notwithstanding the provisions of Section 1542 or
of any similar statute, and for the purpose of
implementing a full and complete release and discharge
of the Releasees, you and the Company expressly
acknowledge that this Agreement is intended to include
in its effect, without limitation, all Claims which are
known and all Claims which you or the Company do not
know or suspect to exist in your or the Company's favor
at the time of execution of this Agreement and that
this Agreement contemplates the extinguishment of all
such Claims.
FOUR: The parties acknowledge that they might
hereafter discover facts different from, or in addition
to, those they now know or believe to be rue with
respect to a Claim or Claims released herein, and they
expressly agree to assume the risk of possible
discovery of additional or different facts, and agree
that this Agreement shall be and remain effective, in
all respects, regardless of such additional or
different discovered facts.
FIVE: You hereby represent and acknowledge that you
have not filed any Claim of any kind against the
Company or others released in this Agreement. You
further hereby expressly agree never to initiate
against the Company or others released in this
Agreement any administrative proceeding, lawsuit or any
other legal or equitable proceeding of any kind
asserting any Claims that are released in this
Agreement.
The Company hereby represents and acknowledges that
it has not filed any Claim of any kind against you or
others released in this Agreement. The Company further
hereby expressly agrees never to initiate against you
or others released in this Agreement any administrative
proceeding, lawsuit or any other legal or equitable
proceeding of any kind asserting any Claims that are
released in this Agreement.
SIX: You hereby represent and agree that you have
not assigned or transferred, or attempted to have
assigned or transfer, to any person or entity, any of
the Claims that you are releasing in this Agreement.
The Company hereby represents and agrees that it has
not assigned or transferred, or attempted to have
assigned or transfer, to any person or entity, any of
the Claims that it is releasing in this Agreement.
SEVEN: As a further material inducement to the
Company to enter into this Agreement, you hereby agree
to indemnify and hold each of the Releasees harmless
from all loss, costs, damages, or expenses, including
without limitation, attorneys' fees incurred by
Releasees, arising out of any breach of this Agreement
by you or the fact that any representation made in this
Agreement by you was false when made.
EIGHT: You and the Company represent and
acknowledge that, in executing this Agreement, neither
is relying upon any representation or statement not set
forth in this Agreement or the Severance Agreement.
NINE: (a)This Agreement shall not in any way be
construed as an admission by the Company that it has
acted wrongfully with respect to you or any other
person, or that you have any rights whatsoever against
the Company, and the Company specifically disclaims any
liability to or wrongful acts against you or any other
person, on the part of itself, its employees or its
agents. This Agreement shall not in any way be
construed as an admission by you that you have acted
wrongfully with respect to the Company, or that you
failed to perform your duties or negligently performed
or breached your duties, or that the Company had good
cause to terminate your employment. (b)If you are a
party or are threatened to be made a party to any
proceeding by reason of the fact that you were an
officer [or director] of the Company, the Company shall
indemnify you against any expenses(including reasonable
attorney fees provided that counsel has been approved
by the Company prior to retention), judgments, fines,
settlements, and other amounts actually or reasonably
incurred by you in connection with that proceeding,
provided that you acted in good faith and in a manner
you reasonably believed to be in the best interest of
the Company. The limitations of California
Corporations Code Section 317 shall apply to this
assurance of indemnification. (c) You agree to
cooperate with the Company and its designated
attorneys, representatives and agents in connection
with any actual or threatened judicial, administrative
or other legal or equitable proceeding in which the
Company is or may be become involved. Upon reasonable
notice, you agree to meet with and provide to the
Company or its designated attorneys, representatives or
agents all information and knowledge you have relating
to the subject matter of any such proceeding.
TEN: This Agreement is made and entered into in
California. This Agreement shall in all respects be
interpreted, enforced and governed by and under the
laws of the State of California. Any dispute about the
validity, interpretation, effect or alleged violation
of this Agreement (an "arbitrable dispute") must be
submitted to arbitration in [Los Angeles][San Diego],
California. Arbitration shall take place before an
experienced employment arbitrator licensed to practice
law in such state and selected in accordance with the
Model Employment Arbitration Procedures of the American
Arbitration Association. Arbitration shall be the
exclusive remedy for any arbitrable dispute. The
arbitrator in any arbitrable dispute shall not have
authority to modify or change the Agreement in any
respect. You and the Company shall each be responsible
for payment of one-half the amount of the arbitrator's
fee(s). Should any party to this Agreement institute
any legal action or administrative proceeding against
the other with respect to any Claim waived by this
Agreement or pursue any arbitrable dispute by any
method other than arbitration, the prevailing party
shall be entitled to recover from the initiating party
all damages, costs, expenses and attorneys' fees
incurred as a result of that action. The arbitrator's
decision and/or award will be fully enforceable and
subject to an entry of judgment by the Superior Court
of the State of California for the County of [Los
Angeles][San Diego].
ELEVEN: Both you and the Company understand that
this Agreement is final and binding eight days after
its execution and return. Should you nevertheless
attempt to challenge the enforceability of this
Agreement as provided in Paragraph TEN or, in violation
of that Paragraph, through litigation, as a further
limitation on any right to make such a challenge, you
shall initially tender to the Company, by certified
check delivered to the Company, all monies received
pursuant to Section 5 of the Employment Agreement, plus
interest, and invite the Company to retain such monies
and agree with you to cancel this Agreement and void
the Company's obligations under Section 5 of the
Employment Agreement. In the event the Company accepts
this offer, the Company shall retain such monies and
this Agreement shall be canceled and the Company shall
have no obligation under Section 5 of the Employment
Agreement. In the event the Company does not accept
such offer, the Company shall so notify you, and shall
place such monies in an interest-bearing escrow account
pending resolution of the dispute between you and the
Company as to whether or not this Agreement and the
Company's obligations under Section 5 of the Employment
Agreement shall be set aside and/or otherwise rendered
voidable or unenforceable. Additionally, any
consulting agreement then in effect between you and The
Company shall be immediately rescinded with no
requirement of notice.
TWELVE: Any notices required to be given under this
Agreement shall be delivered either personally or by
first class United States mail, postage prepaid,
addressed to the respective parties as follows:
To Company: [TO COME]
Attn: [TO COME]
To You:
___________________
___________________
___________________
THIRTEEN: You understand and acknowledge that you
have been given a period of 45 days to review and
consider this Agreement (as well as statistical data on
the persons eligible for similar benefits) before
signing it and may use as much of this 45-day period as
you wish prior to signing. You are encouraged, at your
personal expense, to consult with an attorney before
signing this Agreement. You understand and acknowledge
that whether or not you do so is your decision. You
may revoke this Agreement within seven days of signing
it. If you wish to revoke, the Company's Vice
President, Human Resources must receive written notice
from you no later than the close of business on the
seventh day after you have signed the Agreement. If
revoked, this Agreement shall not be effective and
enforceable and you will not receive payments or
benefits under Section 5 of the Employment Agreement.
FOURTEEN: This Agreement constitutes the entire
Agreement of the parties hereto and supersedes any and
all other Agreements (except the Employment Agreement)
with respect to the subject matter of this Agreement,
whether written or oral, between you and the Company.
All modifications and amendments to this Agreement must
be in writing and signed by the parties.
FIFTEEN: Each party agrees, without further
consideration, to sign or cause to be signed, and to
deliver to the other party, any other documents and to
take any other action as may be necessary to fulfill
the obligations under this Agreement.
SIXTEEN: If any provision of this Agreement or the
application thereof is held invalid, the invalidity
shall not affect other provisions or applications of
the Agreement which can be given effect without the
invalid provisions or application; and to this end the
provisions of this Agreement are declared to be
severable.
SEVENTEEN: This Agreement may be executed in
counterparts.
I have read the foregoing General Release and I accept
and agree to the provisions it contains and hereby
execute it voluntarily and with full under-standing of
its consequences. I am aware it includes a release of
all known or unknown claims.
DATED:____________________
_____________________________
DATED:____________________
_____________________________
You acknowledge that you first received this
Agreement on [date].
___________________________
