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Exhibit 10.65(b)
FIRST AMENDMENT TO EXECUTIVE EMPLOYMENT AGREEMENT
This Agreement, entered into on this 11th of March, 1999, and made
effective as of February 1, 1999, by and between ENRON OIL & GAS COMPANY
("Company" or "Employer") and XXXXXX X. XXXXXX, III ("Employee") is an amendment
to that certain Employment Agreement made effective as of September 1, 1998 (the
"Employment Agreement").
WHEREAS, the parties desire to amend the Employment Agreement as
provided herein;
NOW, THEREFORE, in consideration thereof and of the mutual covenants
contained herein, the parties agree as follows:
1. Article 3, Section 3.5 of the Employment Agreement is hereby
deleted in its entirety and the following is substituted
therefor:
"3.5 Upon an Involuntary Termination of the employment
relationship by either Employer or Employee prior to the
expiration of the Term, Employee shall be entitled, in
consideration of Employee's continuing obligations hereunder
after such termination (including, without limitation,
Employee's non-competition obligations), to receive the then
current Monthly Base Salary as if Employee's employment (which
shall cease on the date of such Involuntary Termination) had
continued for the full Term of this Agreement. Notwithstanding
any other provisions of this Agreement, a termination of the
employment relationship by either the Employer or Employee
which meets the definition of Involuntary Termination under
the Company's Change of Control Severance Plan (the "Plan")
shall constitute an Involuntary Termination under this
Agreement. In the event of such Involuntary Termination which
entitles Employee to severance benefits under the Plan but for
the following severance payment by the Company to the
Employee, Employee shall receive from the Company a severance
benefit under this Agreement equal to the sum of Employee's
then current Monthly Base Salary times 12 times 2.99 plus two
times the Employee's annual bonus target award under the
Company's annual bonus program for the year in which the
Change of Control Date occurs. Employee's severance benefit
payable under the Plan, if any, shall be determined according
to the provisions thereof. Employee shall not be under any
duty or obligation to seek or accept other employment
following Involuntary Termination and the amounts due Employee
hereunder shall not be reduced or suspended if Employee
accepts subsequent employment. Employee's rights under this
Section 3.5 are Employee's sole and exclusive rights against
Employer, Enron, or their affiliates, and Employer's sole and
exclusive liability to Employee under
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this Agreement, in contract, tort, or otherwise, for any
Involuntary Termination of the employment relationship.
Employee covenants not to xxx or lodge any claim, demand or
cause of action against Employer for any sums for Involuntary
Termination other than those sums specified in this Section
3.5. If Employee breaches this covenant, Employer shall be
entitled to recover from Employee all sums expended by
Employer (including costs and attorneys fees) in connection
with such suit, claim, demand or cause of action."
2. The last paragraph of Article 7, Section 7.1 is hereby deleted
in its entirety and the following is substituted therefor:
"These non-competition obligations shall extend until the
earlier of (a) expiration of the Term or (b) one year after
termination of the employment relationship; provided, however,
that upon an Involuntary Termination as defined in the
Company's Change of Control Severance Plan, which entitles
Employee to severance benefits under said Plan, these
non-competition obligations shall expire immediately and have
no further force and effect. Further, if Employer ceases to be
publicly traded, Employee may exercise his right to
voluntarily resign under Section 3.2(ii). If Employee
exercises such right, these non-competition obligations shall
expire immediately and have no further force and effect, and
the Employer shall have no further obligations to Employee
under this Agreement."
3. The following new Article 9 shall be inserted at the end of
the Employment Agreement:
"ARTICLE 9: U.S. EXCISE TAX INDEMNIFICATION
9.1 Indemnification. In the event it shall be
determined that any payment or distribution by the Company to
or for the benefit of Employee (whether paid or payable or
distributed or distributable pursuant to the terms of this
Agreement, the Company's Change of Control Severance Plan or
otherwise, but determined without regard to any additional
payments required under this Article 9) (a "Payment") would be
subject to the excise tax imposed by Section 4999 of the
United States Internal Revenue Code of 1986, as amended (the
"Code"), or any interest or penalties are incurred by Employee
with respect to such excise tax (such excise tax, together
with any such interest and penalties, are hereinafter
collectively referred to as the "Excise Tax"), then Employee
shall be entitled to receive an additional payment (a
"Gross-Up Payment") in an amount such that after payment by
Employee of all taxes (including any interest or penalties
imposed with respect to such taxes), including, without
limitation, any income and employment taxes (and any interest
and penalties imposed with respect thereto) and Excise Tax
imposed upon the Gross-Up Payment, Employee retains an amount
of the Gross-Up Payment equal to the Excise Tax imposed upon
the Payments.
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9.2 Determination of Amount. Subject to the provisions
of Section 9.3, all determinations required to be made under
this Article 9, including whether and when a Gross-Up Payment
is required and the amount of such Gross-Up Payment and the
assumptions to be utilized in arriving at such determination,
shall be made by a public accounting firm chosen by the
Company (the "Accounting Firm") which shall provide detailed
supporting calculations both to the Company and Employee if
requested by either the Company or Employee. All fees and
expenses of the Accounting Firm shall be borne solely by the
Company. Any determination by the Accounting Firm shall be
binding upon the Company and Employee. As a result of the
uncertainty in the application of Section 4999 of the Code at
the time of the initial determination by the Accounting Firm
hereunder, it is possible that Gross-Up Payments which will
not have been made by the Company should have been made
("Underpayment"), consistent with the calculations required to
be made hereunder. In the event that the Company exhausts its
remedies pursuant to Section 9.3 and Employee thereafter is
required to make a payment of any additional Excise Tax, the
Accounting Firm shall determine the amount of the Underpayment
that has occurred and any such Underpayment shall be promptly
paid by the Company to or for the benefit of Employee.
9.3 Contest of Claims. If the Company elects to contest
a claim by the Internal Revenue Service that Excise Tax is due
from Employee, Employee shall cooperate fully with the Company
in order to effectively contest such claim, including, but not
limited to providing information reasonably requested by the
Company relating to such claim, accepting legal representation
with respect to such claim by an attorney reasonably selected
by the Company and permitting the Company to participate in
any proceedings relating to such claim. The Company shall bear
and pay directly all costs and expenses (including additional
interest and penalties) incurred in connection with such
contest and shall indemnify and hold Employee harmless, on an
after-tax basis, for any Excise Tax or other tax (including
interest and penalties with respect thereto) imposed as a
result of such representation and payment of costs and
expenses.
9.4 Advances and Refunds. If the Company directs
Employee to pay a claim by the Internal Revenue Service and
xxx for a refund, the Company shall advance the amount of such
payment to Employee on an interest-free basis and shall
indemnify and hold Employee harmless, on an after-tax basis,
from any Excise Tax or income tax (including interest or
penalties with respect thereto) imposed with respect to such
advance or with respect to any imputed income with respect to
such advance. If, after the receipt by Employee of an amount
advanced by the Company pursuant to this Section 9.4, Employee
becomes entitled to receive, and receives, any refund with
respect to such claim, Employee shall promptly pay to the
Company the amount of such refund (together with any interest
paid or credited thereon after taxes applicable thereto). If,
after the receipt by Employee of an amount advanced by the
Company pursuant to this
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Section 9.4, a determination is made that Employee is not
entitled to any refund with respect to such claim, then such
advance shall not be required to be repaid and the amount of
such advance shall offset, to the extent thereof, the amount
of Gross-Up Payment required to be paid."
This Agreement is the First Amendment to the Employment Agreement, and
the parties agree that all other terms, conditions and stipulations contained in
the Employment Agreement, and any amendments thereto, shall remain in full force
and effect and without any change or modification, except as provided herein.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the date first above written.
ENRON OIL & GAS COMPANY
By: /s/ Xxxxxxx X. Xxxxxxx
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Name: Xxxxxxx X. Xxxxxxx
Title: Chairman
This 11th day of March, 1999
XXXXXX X. XXXXXX, III
/s/ Xxxxxx X. Xxxxxx, III
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This 11th day of March, 1999
