Exhibit 10.11
April 8, 1997
▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇
6540 Rutgers
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Dear ▇▇▇▇:
Subject to the ratification of this Agreement by the Compensation,
Corporate Governance and Human Resources Committee ("Compensation Committee") of
the Board of Directors of NGC Corporation, set forth below are the terms of your
employment by NGC Corporation (hereinafter referred to collectively as "NGC" or
the "Company").
1. TITLE AND DUTIES
Your title shall be Senior Vice President and Chief Financial Officer.
You will be responsible for the duties typical to such position and shall have
such other duties as may be delegated from time to time by your immediate
supervisor. You shall devote your full time, energy and skill to the performance
of your duties for NGC, and will exercise due diligence and reasonable care in
the performance of such duties. For the Term of this Agreement you shall report
to the Company's Chief Executive Officer and be a member of the Company's
Corporate Strategy and Policy Committee. In addition, you will be permitted to
continue as Director of Allwaste, Inc. and such other business, professional or
charitable affiliations with the prior written approval of the Company's Chief
Executive Officer.
2. TERM
(a) Unless earlier terminated as provided for herein, the Term of this
Agreement will be for five years, beginning no later than April 22, 1997.
(b) If your employment with NGC is terminated due to your voluntary
resignation or by the Company for "cause", this Agreement shall terminate
immediately (except for the confidentiality, non-competition and non-
solicitation provisions of Paragraph 4), and the Company shall have no further
obligation to you except for the payment of amounts due before the date of such
termination. You further agree that the benefits which you shall have received
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April 8, 1997
Page 2
from the execution of this Agreement through the date of such termination
constitute sufficient consideration for your obligations pursuant to Paragraph
4, notwithstanding the fact that the Company has no further obligation to you
except for the payment of amounts due before the date of such termination. For
purposes of this Agreement, you may be terminated for "cause" as a result of (i)
refusal to implement or adhere to policies or directives of the Board of
Directors of NGC; (ii) serious misconduct, dishonesty or disloyalty, directly
related to the performance of duties for the Company, which results from a
willful act or omission or from gross negligence, and which is materially or is
likely to be materially injurious to the operations, financial condition or
business reputation of the Company or any significant subsidiary thereof; (iii)
your being convicted (or entering into a plea bargain admitting criminal guilt)
in any criminal proceeding that may have an adverse impact on the Company's
reputation and standing in the community; (iv) drug or alcohol abuse; (v)
willful and continued failure to perform your duties under this Agreement; or
(vi) any other material breach of this Agreement by you that is not cured within
thirty days after written notice of such breach is delivered to you from the
Company. For these purposes, no act or failure to act shall be considered
"willful" unless it is done, or omitted to be done, in bad faith without
reasonable belief that the action or omission was in the best interest of the
Company.
(c) If your employment is terminated during the Term of this Agreement
due to resignation following "constructive termination" (as defined below) or
for any other reason other than your voluntary resignation, death, disability,
or discharge for cause, you shall receive a cash payment within 30 days of
termination of $5,000,000 less any compensation received prior to termination
and less the value of any already exercised or vested options exercisable,
provided however, that such payment shall not be greater than 2.99 times the sum
of your base salary plus guaranteed annual bonus at the time of your
termination. In addition, any employee stock options granted to you during the
term of your employment shall become fully vested as of the date of termination
and shall be exercisable for a period of one year thereafter. Also at your
option, you will receive medical and life insurance coverage for the remainder
of the Term at the same cost as provided to employees.
For purposes of this Agreement a "constructive termination" shall be
deemed to have occurred in the event that (i) your Base Salary as defined in
Paragraph 3(a), bonus compensation under Paragraph 3(b), option grants under
Paragraphs 3(c) and 3(d) or other compensation as described in Paragraphs 3(e),
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April 8, 1997
Page 3
3(f), 3(g) and 3(h) is reduced; (ii) a significant diminution in your
responsibilities, authority or scope of duties is effected by the Board of
Directors or as the result of the change in control of the Company, and such
diminution is made without your written consent (without regard to whether or
not any change is made to your title); or (iii) the Company materially breaches
this Agreement. For purposes of this Agreement, a "change in control of the
Company" means the occurrence of any of the following events: (a) any "person"
or "group" (as such terms are used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act")) is or becomes the
"beneficial owner" (as defined in Rule l3d-3 under the Exchange Act), directly
or indirectly, of more than 50% of the total voting stock of the Company; (b)
the Company is merged with or into or consolidated with another person and,
immediately after giving effect to the merger or consolidation, (A) less than
50% of the total voting power of the outstanding voting stock of the surviving
or resulting person is then "beneficially owned" (within the meaning of Rule
l3d-3 under the Exchange Act) in the aggregate by (x) the stockholders of the
Company immediately prior to such merger or consolidation, or (y) if a record
date has been set to determine the stockholders of the Company entitled to vote
with respect to such merger or consolidation, the stockholders of the Company as
of such record date and (B) any "person" or "group" (as defined in Section
13(d)(3) or 14(d)(2) of the Exchange Act) has become the direct or indirect
"beneficial owner" (as defined in Rule l3d-3 under the Exchange Act) of more
than 50% of the voting power of the voting stock of the surviving or resulting
person; (c) the Company, either individually or in conjunction with one or more
of its subsidiaries, sells, assigns, conveys, transfers, leases or otherwise
disposes of, or the subsidiaries sell, assign, convey, transfer, lease or
otherwise dispose of, all or substantially all of the properties and assets of
the Company and the subsidiaries, taken as a whole (either in one transaction or
a series of related transactions), to any person (other than the Company or a
wholly owned subsidiary); or (d) the liquidation or dissolution of the Company.
Any resignation by you as a result of assertion of a constructive termination
shall be communicated by delivery to the Board of Directors of the Company
thirty days' advance written notice of such constructive termination and the
grounds therefor, during which period the Company shall be entitled to cure or
remedy the matters set forth in such notice to your reasonable satisfaction.
Unless you withdraw such notice prior to the expiration of such thirty day
period, such resignation shall take effect upon the expiration of thirty days
from the date of the delivery of such notice. Any other resignation by you shall
be communicated by thirty days' advance written notice.
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April 8, 1997
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(d) If you die, or become disabled and cannot perform your duties, you
(or your estate) shall be entitled to the Base Salary (as defined in Paragraph 3
(a)) payable to you hereunder for three months following the month in which you
die or become disabled, plus the amount of any guaranteed bonus as described in
Paragraph 3(b) guaranteed pursuant to Paragraph 3(b) for the year of death or
disability, prorated through the date of death or disability. For purposes of
this Agreement, you shall be disabled as of the first date on which you become
eligible to receive disability benefits under the Company's long-term disability
plan (or Social Security disability benefits at a time when the Company does not
maintain a long-term disability plan or such plan is not available to you).
3. COMPENSATION
(a) Each year during the Term hereof, you will be paid a base salary
of $250,000 per annum ("Base Salary"), payable in accordance with the Company's
payroll guidelines. Increases may be made to your Base Salary at the discretion
of the Board of Directors based upon your individual performance.
(b) You shall be a participant in the Company's Incentive Compensation
Plan. You shall receive a guaranteed bonus of at least $100,000 per annum during
the five year Term with the first such payment to be made on or before March 31,
1998. As part of NGC's incentive compensation program, you will have the
opportunity to earn Additional Compensation, dependent upon NGC's financial
performance and other personal strategic objectives, determined in accordance
with such program.
(c) Upon your start date, you will receive an initial amount of
discounted stock options under NGC's Employee Equity Option Plan (EEOP) with an
immediate in-the-money value of $250,000. The options are subject to the
vesting, forfeiture and other terms and conditions of the EEOP. In addition, you
will receive a cash payment within 5 days of hire of $250,000 (the sign-on
bonus).
(d) Each year during the Term of this Agreement, commencing with the
date of hire and continuing thereafter in December of 1997, 1998, 1999 and 2000,
you will receive stock option grants, with an exercise price equal to market
price on date of grant, under the NGC Corporation Amended & Restated 1991 Stock
Option Plan, with a five year projected value of $250,000. You recognize that
the projected value is subject to the future market performance of the Company
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April 8, 1997
Page 5
stock and that there is no guarantee that the actual value of such options will
achieve that value. "Projected value" means that at the end of five years from
date of grant, assuming an increase in market price of 15% per annum during the
five years, the stock option may be exercised to obtain stock having a market
price of $250,000 over the exercise price. These options are subject to the
vesting, forfeiture and other terms and conditions of the NGC Corporation
Amended & Restated 1991 Stock Option Plan.
(e) In the event you remain employed by the Company at the end of the
Term of this Agreement, and if your total compensation (i.e. sign-on bonus, base
salary, incentive compensation, and the value at time of termination of any EEOP
and market options granted pursuant to Paragraphs 3(a), 3(b), 3(c) and 3(d))
during the Term of this Agreement is less than $5 million, then NGC will either
(i) make a cash payment to you for the difference or (ii) grant you additional
options which shall be fully vested with an in-the-money value equal to the
difference.
(f) You will be entitled to participate in NGC's benefits programs for
senior management executives, including, without limitation, NGC's deferred
compensation plan for executives, and NGC's Alternative Benefits for Senior
Executives Plan. Pursuant to the terms of NGC's vacation policy you will be
entitled to four weeks per year of paid vacation.
(g) The Company will pay an additional $5,000 per year on your behalf
to provide you with additional life insurance and disability coverage in excess
of the death benefit or disability coverage under NGC's standard executive
employee and benefit plans. You shall select such coverage and shall own the
insurance policies providing such coverage. You will be responsible for coverage
and effectiveness of the policies, the Company's only obligation being to pay
such amounts.
(h) You shall be entitled to participate in such other plans and
receive such other perquisites as the Board of Directors of the Company in its
sole discretion determines, including but not limited to reserved parking,
annual physical examination and federal income tax planning and return
preparation not to exceed $25,000 annually.
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April 8, 1997
Page 6
4. CONFIDENTIALITY
You recognize and acknowledge that:
(a) You will have access to certain information concerning the Company
that is confidential and proprietary and constitutes valuable and unique
property of the Company. You agree that you will not at any time, either during
or after your employment, disclose to others, use, copy or permit to be copied,
except pursuant to your duties on behalf of the Company or its successors,
assigns or nominees, any secret or confidential information of the Company
(whether or not developed by you) without the prior written consent of the Board
of Directors of the Company. The term "secret or confidential information of the
Company" (sometimes referred to herein as "Confidential Information") shall
include, without limitation, the Company's plans, strategies, potential
acquisitions, costs, prices, systems for buying, selling, and/or trading natural
gas, natural gas liquids, crude oil, coal, and electricity, client lists,
pricing policies, financial information, the names of and pertinent information
regarding suppliers, computer programs, policy or procedure manuals, training
and recruiting procedures, accounting procedures, the status and content of the
Company's contracts with its suppliers or clients, or servicing methods and
techniques at any time used, developed, or investigated by the Company, before
or during your tenure of employment to the extent any of the foregoing are (i)
not generally available to the public and (ii) maintained as confidential by the
Company. You further agree to maintain in confidence any confidential
information of third parties received as a result of your employment and duties
with the Company.
(b) At the termination of your employment you will deliver to the
Company, as determined appropriate by the Company, all correspondence,
memoranda, notes, records, client lists, computer systems, programs, or other
documents and all copies thereof made, composed or received by you, solely or
jointly with others, and which are in your possession, custody, or control at
such date and which are related in any manner to the past, present, or
anticipated business of the Company.
(c) To protect and safeguard the Company's trade secrets and
Confidential Information and also the Company's goodwill with its suppliers and
clients, for a period of twelve months following the termination of your
employment for any reason, you will not, within a 50 mile radius of any location
where the Company had an office at any time during the Term hereof or any
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April 8, 1997
Page 7
location where a client or supplier of the Company (which is a material client
or supplier at any time during the Term hereof) had an office at any time during
the Term hereof, without the prior written consent of the Board of Directors of
the Company, directly or indirectly, engage in or be interested in (as owner,
partner, shareholder, employee, director, agent, consultant or otherwise), any
business which is a competitor of the Company, as hereinafter defined. For
purposes of this Agreement, a "competitor of the Company" is any entity,
including without limitation a corporation, sole proprietorship, partnership,
joint venture, syndicate, trust or any other form of organization or a parent,
subsidiary or division of any of the foregoing, which, during such period or the
immediately preceding fiscal year of such entity, was engaged in the unregulated
marketing, gathering, transportation or processing of natural gas or derivatives
of natural gas or other hydrocarbons or electricity. For purposes of this
paragraph, the following entities shall not be deemed to be competitors of the
Company: (i) a Local Distribution Company ("LDC") to the extent that any
purchases or sales by such LDC are only for consumption on its system; (ii) a
natural gas producer to the extent that such producer sells only its own
production or production of other working interest owners in ▇▇▇▇▇ in which it
owns an interest; (iii) a natural gas pipeline company in the jurisdictional
aspects of its business, i.e., other than a nonjurisdictional marketing
affiliate or production affiliate (except as to such production affiliates own
production as described in clause (ii) of this Paragraph 4(c)). The terms of
this Paragraph 4(c) shall not apply to your present or future investments in the
securities of companies listed on a national securities exchange or traded on
the over-the-counter market to the extent such investments do not exceed one
percent (1%) of the total outstanding shares of such company.
(d) For a period of twenty-four months after the expiration or
termination of your employment for whatever reason, you shall not induce or
otherwise entice any employee of the Company to leave the Company, nor shall you
attempt to hire any of the Company's employees.
(e) You agree that the foregoing restrictions contain reasonable
limitations as to the time, geographical area, and scope of activity to be
restrained and that these restrictions do not impose any greater restraint than
is necessary to protect the goodwill and other legitimate business interests of
the Company, including but not limited to the protection of Confidential
Information. You also agree that the general public shall not be harmed by
enforcement of this Paragraph 4. Should any provision in this Paragraph 4 be
held unreasonably broad with respect to the restrictions as to time,
geographical area, or scope of activity to be restrained, any such restriction
shall be construed by limiting and
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April 8, 1997
Page 8
reducing it to the extent necessary to render it reasonable, and as so
construed, such provision shall be enforced.
5. INDEMNIFICATION
If, at any time during or after the Term of this Agreement, you are
made a party to, or are threatened to be made a party in, any civil, criminal or
administrative action, suit or proceeding by reason of the fact that you are or
were a director, officer, employee, or agent of the Company, or of any other
corporation or any partnership, joint venture, trust or other enterprise for
which you served as such at the request of the Company, then you shall be
indemnified by the Company against expenses actually and reasonably incurred by
you or imposed on you in connection with, or resulting from, the defense of such
action, suit or proceeding, or in connection with, or resulting from, any appeal
therein if you acted in good faith and in a manner you reasonably believed to be
in or not opposed to the best interest of the Company, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe your conduct
was unlawful, except with respect to matters as to which it is adjudged that you
are liable to the Company or to such other corporation, partnership, joint
venture, trust or other enterprise for gross negligence or willful misconduct in
the performance of your duties. As used herein, the term "expenses" shall
include all obligations actually and reasonably incurred by you for the payment
of money, including, without limitation, attorney's fees, judgments, awards,
fines, penalties and amounts paid in satisfaction of a judgment or in settlement
of any such action, suit or proceeding, except amounts paid to the Company or
such other corporation, partnership, joint venture, trust or other enterprise by
you.
6. ARBITRATION
Any controversy or claim arising out of or relating to this Agreement,
or any breach thereof, shall, except as provided in Paragraph 4, be adjudged
only by arbitration in accordance with the rules of the American Arbitration
Association, and judgment upon such award rendered by the arbitrator may be
entered in any court having jurisdiction thereof. The arbitration shall be held
in the City of Houston, Texas, or such other place as may be agreed upon at the
time by the parties to the arbitration. Subject to the limitations set forth
below, the arbitrator(s) shall, in their award, allocate between the parties the
costs of arbitration, which shall include reasonable attorneys' fees of the
parties, as well
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April 8, 1997
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as the arbitrators' fees and expenses, in such proportions as the arbitrator(s)
deem just; provided however, notwithstanding the above, in the event you are the
prevailing party, then the Company agrees to reimburse you for all such costs of
arbitration, including but not limited to attorneys' fees and arbitrators' fees
and expenses reasonably incurred by you; provided further, notwithstanding the
above, in the event the Company is the prevailing party, then the total costs of
arbitration, including but not limited to attorneys' fees reasonably incurred by
the Company and arbitrators' fees and expenses, that may be allocated to you by
the arbitrator(s) shall not in any event exceed Twenty-Five Thousand Dollars
($25,000). Notwithstanding the foregoing, you shall be entitled to seek specific
performance in a court of competent jurisdiction of your right to be paid your
full compensation until your separation from employment, during the pendency or
dispute of any controversy arising under or in connection with this Agreement.
7. OTHER PROVISIONS
(a) THIS AGREEMENT WILL BE GOVERNED BY, CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, EXCLUDING ANY CONFLICTS OF LAW,
RULE OR PRINCIPLE THAT MIGHT OTHERWISE REFER TO THE SUBSTANTIVE LAW OF ANOTHER
JURISDICTION.
(b) Except as otherwise indicated, this Agreement is not assignable
without the written authorization of both parties; provided that the Company may
assign this Agreement to any entity to which the Company transfers substantially
all of its assets or to any entity which is a successor to the Company by
reorganization, incorporation, merger or similar business combination.
(c) Except as otherwise provided herein, the provisions of Paragraphs
4, 5 and 6 of this Agreement shall survive the termination of this Agreement.
(d) This Agreement supersedes all previous employment agreements,
written or oral, between the Company and you. This Agreement may be amended only
by written amendment duly executed by both parties or their
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April 8, 1997
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legal representatives and authorized by action of the Board. Except as otherwise
specifically provided in this Agreement, no waiver by either party hereto of any
breach by the other party hereto of any condition or provision of this Agreement
to be performed by such other party shall be deemed a waiver of a subsequent
breach of such condition or provision or a waiver of a similar or dissimilar
provision or condition at the same or at any prior or subsequent time.
(e) Any notice or other communication required or permitted pursuant
to the terms of this Agreement shall be in writing and shall be deemed to have
been duly given when delivered or mailed by United States mail, first class,
postage prepaid and registered with return receipt requested, addressed to the
intended recipient at his or its address set forth below and, in the case of a
notice or other communication to the Company, directed to the attention of the
Board of Directors with a copy to the Secretary of the Company, or to such other
address as the intended recipient may have theretofore furnished to the sender
in writing in accordance herewith, except that until any notice of change of
address is received, notices shall be sent to the following addresses:
IF TO YOU: IF TO THE COMPANY:
▇▇▇▇ ▇. ▇▇▇▇▇▇ NGC Corporation
6540 Rutgers ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
(f) If any one or more of the provisions or parts of a provision
contained in this Agreement shall for any reason be held to be invalid, illegal
or unenforceable in any respect, such invalidity or unenforceability shall not
affect any other provision or part of a provision of this Agreement, but this
Agreement shall be reformed and construed as if such invalid or illegal or
unenforceable provision or part of a provision had never been contained herein
and such provisions or part thereof shall be reformed so that it would be valid,
legal and enforceable to the maximum extent permitted by law.
(g) You shall not be required to mitigate damages (or the amount of
any compensation provided under this Agreement to be paid) following your
termination of employment, by seeking employment or otherwise.
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April 8, 1997
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If the foregoing reflects your understanding of the terms of your
employment with the Company, please execute each copy of this letter in the
space provided below.
NGC CORPORATION
By: /s/ ▇. ▇. ▇▇▇▇▇▇
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▇. ▇. ▇▇▇▇▇▇
AGREED AND ACCEPTED this
14th day of April, 1997, and
effective as of April 22, 1997
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
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