Exhibit 10.18
SEVERANCE AGREEMENT
THIS AGREEMENT, dated _____________________ (the "Effective Date"),
is made by and between Pacific Enterprises, a California corporation ("PE"),
and ______________________ the "Executive").
WHEREAS, severance benefits have historically been provided to
senior executives, officers and other key employees of PE and its
subsidiaries and affiliates (PE and its subsidiaries and affiliates at any
given time being referred to herein collectively as the "PE Group"); and
WHEREAS, the Executive is currently employed by PE and may from time
to time during the term of this Agreement be employed by one or more other
members of the PE Group (Executive's then PE Group employer hereinafter
referred to as the "Employer"); and
WHEREAS, the Board of Directors of PE has determined that it is in
the best interests of PE to institute formalized severance arrangements for
certain of its executives, officers and key employees, including the
Executive.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, PE and the Executive hereby agree as follows:
1. TERM OF AGREEMENT. Subject to the provisions of Section 12
hereof, the Term of this Agreement shall commence on the Effective Date and
shall continue in effect through the third anniversary of the Effective Date;
PROVIDED, HOWEVER, that on each anniversary of the Effective Date during the
Term of this Agreement, the Term shall automatically be extended for one
additional year unless, not later than 90 days prior to any such anniversary,
the Executive or the Employer shall have given notice in accordance with
Section 8 not to extend the Term.
2. COMPENSATION OTHER THAN SEVERANCE PAYMENTS
2.1 ACCRUED SALARY. If, during the Term, the Executive's
employment with the Employer shall terminate for any reason, the Employer
shall pay the Executive's full salary to the Executive through the Date of
Termination (as defined in Section 4.2) at the rate in effect immediately
prior to the Date of Termination or, if higher, the rate in effect
immediately prior to the first occurrence of an event or circumstance
constituting Good Reason, together with all compensation and benefits payable
to the Executive through the Date of Termination under the terms of the
Employer's compensation and benefit plans, programs or arrangements as in
effect immediately prior to the Date of Termination or, if more favorable to
the Executive, as in effect immediately prior to the first occurrence of an
event or circumstance constituting Good Reason. For purposes of this
Agreement, the transfer of Executive's employment from the Employer to
another member of the PE Group shall not alone be deemed to constitute a
termination of Executive's employment.
2.2 POST-TERMINATION BENEFITS. If, during the Term, the
Executive's employment with the Employer shall terminate for any reason, the
Employer shall pay to the Executive the Executive's normal post-termination
compensation and benefits as such payments become due. Such post-termination
compensation and benefits shall be determined under, and paid in accordance
with, the Employer's retirement, insurance and other compensation or benefit
plans, programs and arrangements as in effect immediately prior to the Date
of Termination or, if more favorable to the Executive, as in effect
immediately prior to the occurrence of the first event or circumstance
constituting Good Reason.
3. ENTITLEMENT TO SEVERANCE BENEFITS.
3.1 BENEFITS. Subject to Sections 3.2 and 3.5 hereof,
if, during the Term, the Executive's employment with the Employer is
terminated (x) by the Employer other than (i) for Cause (as defined in
Section 17(A)) or (ii) by reason of Executive's death or disability (as
defined in the Employer's long term disability policy in effect from time to
time) or (y) by the Executive for Good Reason (as defined in Section 17(B)),
the Employer shall pay the Executive the amounts, and provide the Executive
the benefits, described in this Section 3.1 ("Severance Payments") in
addition to any payments and benefits to which the Executive is entitled
under Section 2 hereof.
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(A) LUMP SUM PAYMENT. In lieu of any further
salary payments to the Executive for periods
subsequent to the Date of Termination and in lieu
of any cash severance payment otherwise payable to
the Executive under any other severance plan,
policy or arrangement maintained by the Employer,
the Employer shall pay to the Executive a lump
sum severance payment, in cash, equal to 1.5 times
the Executive's annual base salary as in effect
immediately prior to the Date of Termination or, if
higher, in effect immediately prior to the first
occurrence of an event or circumstance constituting
Good Reason.
(B) CONTINUATION OF WELFARE BENEFITS. For the
eighteen (18) month period immediately following the
Date of Termination, the Employer shall arrange to
provide the Executive and his or her dependents
with life, accident and health insurance benefits
substantially similar to those provided to the
Executive and his or her dependents immediately prior
to the Date of Termination or, if more favorable to
the Executive, those provided to the Executive and
his or her dependents immediately prior to the first
occurrence of an event or circumstance constituting
Good Reason, at no greater cost to the Executive than
the cost of such benefits to the Executive immediately
prior to such date or occurrence. Benefits otherwise
receivable by the Executive pursuant to this
Section 3.1(B) shall be reduced to the extent benefits
of the same type are received by the Executive from
another employer during the eighteen (18) month
period following the Executive's termination of
employment (and any such benefits received by the
Executive shall be reported to the Employer by the
Executive).
(C) ACCELERATED VESTING OF STOCK OPTIONS. All
stock options held by Executive under any stock option
or incentive plan maintained by any member of the
PE Group shall immediately vest and become exercisable
as of the Date of Termination, to be exercised in
accordance with the terms of the applicable plan.
(D) ACCELERATED VESTING OF DIVIDEND EQUIVALENT
RIGHTS ("DERs"). All DERs granted in connection with
any stock option held by Executive under any stock
option or incentive plan maintained by any member of
the PE Group shall immediately vest and shall become
payable at target upon exercise of the related stock
option in accordance with the terms of the applicable
plan.
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(E) DEFERRED COMPENSATION PAYOUT. Payments to
Executive under the Pacific Enterprises Deferred
Compensation Plan for Key Management Employees (the
"Deferred Compensation Plan") or any similar or
successor plan maintained by any member of the PE
Group shall be made without reduction in the interest
rate applicable to Executive's account thereunder
pursuant to Section VIII.B of the Deferred
Compensation Plan or any similar or successor provision
of the Deferred Compensation Plan or any similar or
successor plan.
(F) FINANCIAL PLANNING. The Employer shall
provide Executive with financial planning services
and/or benefits for a period of one (1) year
following the Date of Termination at a level
consistent with the benefits provided under PE's
financial planning program for executives and
officers in effect as of the Effective Date.
(G) ACCRUED VACATION. The Employer shall provide
Executive with a cash payment in an amount equal to
Executive's accrued vacation benefits through the Date
of Termination, such amount calculated on the basis of
the salary used for purposes of the calculation in
Section 3.1(A).
(H) OUTPLACEMENT SERVICES. The Employer shall
provide the Executive with outplacement services
suitable to the Executive's position for a period of
eighteen (18) months or, if earlier, until the first
acceptance by the Executive of an offer of employment
with a subsequent employer, in an aggregate amount
not to exceed $30,000.
3.2 SECTION 280G LIMITATION ON BENEFITS.
(A) 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 (i) any member of
the PE Group, (ii) any Person (as defined in
Section 17(C)) whose actions result in a change in the
ownership or effective control of any member of the PE
Group or a substantial portion of its assets
(a "Section 280G Event") or (iii) any Person affiliated
with 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 any member of the PE Group or a
Person making such payment or providing
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such benefit as a result of section 280G of the
Internal Revenue Code of 1986, as amended (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 non-cash Severance Payments reduced
(or eliminated) prior to any reduction of the cash
Severance Payments.
(B) For purposes of this limitation, (i) 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, (ii) 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
accounting firm which was, immediately prior to the
Section 280G Event, PE'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, (iii) the Severance Payments shall be reduced
only to the extent necessary so that the Total
Payments (other than those referred to in clause
(i) or (ii)) 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 (iv) 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.
(C) If it is established pursuant to a final
determination of a court or an Internal Revenue Service
proceeding that, notwithstanding the good faith of the
Executive, PE and the Employer in applying the terms of
this Section 3.2, the Total Payments paid to or for the
Executive's benefit are in an amount that would result
in any portion of such Total Payments being subject to
any excise tax imposed under Section 4999 of the Code
(the "Excise Tax"), then, if such repayment would
result in (x) no portion of the remaining Total
Payments being
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subject to the Excise Tax and (y) a dollar-for-dollar
reduction in the Executive's taxable income and wages
for purposes of federal, state and local income and
employment taxes, the Executive shall have an
obligation to pay the Employer upon demand an amount
equal to the sum of (i) the excess of the Total
Payments paid to or for the Executive's benefit
over the Total Payments that could have been paid to
or for the Executive's benefit without any portion of
such Total Payments being subject to the Excise Tax;
and (ii) interest on the amount set forth in clause
(i) of this sentence at the rate provided in section
1274(b)(2)(B) of the Code from the date of the
Executive's receipt of such excess until the date of
such payment.
3.3 TIMING OF PAYMENTS. Subject to Section 3.5, the
payments provided in subsections (A) and (G) of Section 3.1 shall be made not
later than the fifth business day following the later of (i) the Date of
Termination and (ii) the date the release referenced in Section 3.5 becomes
irrevocable; PROVIDED, HOWEVER, that if the amounts of such payments, and the
limitation on such payments set forth in Section 3.2, cannot be finally
determined on or before such day, the Employer shall pay to the Executive on
such day an estimate, as determined in good faith by the Employer, of the
minimum amount of such payments to which the Executive is clearly entitled
and shall pay the remainder of such payments (together with interest on the
unpaid remainder (or on all such payments to the extent, the Employer fails
to make such payments when due) at 120% of the rate provided in section
1274(b)(2)(B) of the Code) as soon as the amount thereof can be determined
but in no event later than the thirtieth (30th) day after the Date of
Termination. In the event that the amount of the estimated payments exceeds
the amount subsequently determined to have been due, such excess shall
constitute a loan by the Employer to the Executive, payable on the fifth
(5th) business day after demand by the Employer (together with interest at
120% of the rate provided in section 1274(b)(2)(B) of the Code). At the time
that payments are made under this Agreement, the Employer shall provide the
Executive with a written statement setting forth the manner in which such
payments were calculated and the basis for such calculations including,
without limitation, any opinions or other advice the Employer has received
from Tax Counsel, the Auditor or other advisors or consultants (and any such
opinions or advice which are in writing shall be attached to the statement).
3.4 LEGAL FEES. The Employer 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
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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 Executive shall prevail as to the material issues raised in any such
dispute.
3.5 RELEASE. Notwithstanding anything herein to the contrary,
the Employer's obligation to make the payments provided for in this Section 3
is expressly made subject to and conditioned upon (i) Executive's prior
execution of a release substantially in the form attached hereto as Exhibit A
within 45 days after the applicable Date of Termination and (ii) Executive's
non-revocation of such release in accordance with the terms thereof.
4. TERMINATION PROCEDURES.
4.1 NOTICE OF TERMINATION. During the Term, any purported
termination of the Executive's employment (other than by reason of death)
shall be communicated by written Notice of Termination from the Employer to
the Executive (or vice versa) in accordance with Section 8. For purposes of
this Agreement, a "Notice of Termination" shall mean a notice which 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-quarters (3/4) of the entire membership of the
Board of Directors of PE at a meeting of such board called and held 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 such board) finding that, in the good faith
opinion of such 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.
4.2 DATE OF TERMINATION. "Date of Termination," with respect
to any purported termination of the Executive's employment during the Term,
shall mean the date specified in the Notice of Termination (which, in the case
of a termination by the Employer, shall not be less than thirty (30) days
(except in the case of a termination for 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, respectively, from the date such Notice of
Termination is given).
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5. NO MITIGATION. In the event of the termination of Executive's
employment during the Term, the Executive shall not be required to seek other
employment or to attempt in any way to reduce any amounts payable to the
Executive by the Employer pursuant to Section 3. Further, the amount of any
payment or benefit provided for in this Agreement (other than under Section
3.1(B)) shall not be reduced by any compensation earned by the Executive as
the result of employment by another employer, by retirement benefits, by
offset against any amount claimed to be owed by the Executive to the
Employer, or otherwise.
6. PERFORMANCE; ASSUMPTION OF AGREEMENT.
6.1 In the event that, during the Term, Executive shall be
transferred to any Employer other than PE, PE shall take any and all action
as may be necessary to cause such Employer to assume all of the duties,
obligations and liabilities of the Employer hereunder.
6.2 In the event that, during the Term, (i) the Employer shall
cease to be a member of the PE Group, or (ii) the PE Group undergoes a
reorganization or other corporate restructuring such that it is then no
longer appropriate, consistent with the intent of this Agreement, for PE to
continue to discharge its duties, obligations and liabilities hereunder, PE
shall, prior to the effectiveness of such event, take all such action as may
be necessary to provide that the Employer or any parent of the Employer, as
appropriate consistent with the intent of this Agreement (the "New Parent
Entity"), shall assume all of the rights, duties, obligations and
liabilities of "PE" hereunder, and in such event all references herein to the
"PE Group" shall be deemed to include reference to the group consisting of
such New Parent Entity and its then subsidiaries and affiliates. In this
regard, it is the intent of this Agreement that, to the extent reasonably
practicable, any entity responsible for discharging the duties, obligations
and liabilities of "PE" hereunder should have a Board of Directors consisting
of a majority of outside directors.
6.3 In addition to any obligations imposed by law upon any
successor to the Employer, the Employer 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 Employer to
expressly assume and agree to perform this Agreement in the same manner and
to the same extent that the Employer would be required to perform it if no
such succession had
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taken place, and the Employer shall obtain such assumption and agreement
prior to the effectiveness of any such succession.
6.4 The failure of PE or the Employer, as applicable, to
perform its respective obligations under Sections 6.1, 6.2 and 6.3, shall be a
breach of this Agreement and shall entitle the Executive to compensation from
the Employer in the same amount and on the same terms as the Executive would
be entitled to hereunder if the Executive were to terminate the Executive's
employment with the Employer for Good Reason, except that, for purposes of
implementing the foregoing, the date on which the applicable event or
succession becomes effective shall be deemed the Date of Termination.
7. SUCCESSORS. This Agreement shall inure to the benefit of and
be enforceable by the Executive's personal or legal representatives,
executors, administrators, successors, heirs, distributees, devisees and
legatees. If the Executive shall die while any amount would still be payable
to the Executive hereunder (other than payments which, by their terms,
terminate upon the death of the Executive) if the Executive had continued to
live, all such amounts, unless otherwise provided herein, shall be paid in
accordance with the terms of this Agreement to the executors, personal
representatives or administrators of the Executive's estate.
8. NOTICES. For the purpose of this Agreement, notices and all
other communications provided for in the Agreement shall be in writing and
shall be deemed to have been duly given when delivered or mailed by United
States registered mail, return receipt requested, postage prepaid, addressed,
if to the Executive, to the address inserted below the Executive's signature
on the final page hereof and, if to PE, to the address set forth below, or to
such other address as either party may have furnished to the other in
writing in accordance herewith, except that notice of change of address shall
be effective only upon actual receipt:
To Pacific Enterprises:
000 X. 0xx Xxxxxx
Xxx Xxxxxxx, XX 00000-0000
X.X. Xxx 0000
Xxx Xxxxxxx, XX 00000-0000
Attention: Chief Executive Officer
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9. CONFIDENTIALITY; NON-SOLICITATION.
9.1 CONFIDENTIALITY. Executive acknowledges that in the course
of his or her employment within the PE Group, he or she 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 PE Group; and Executive agrees that it
would be extremely damaging to the PE Group, if such Proprietary Information
were disclosed to a competitor of the PE Group or to any other person or
corporation. Executive understands and agrees that all Proprietary Information
has been divulged to Executive in confidence and further understands and
agrees to keep all Proprietary Information secret and confidential without
limitation in time. In view of the nature of Executive's employment and the
Proprietary Information Executive has acquired during the course of such
employment, Executive likewise agrees that the PE Group would be irreparably
harmed by any disclosure of Proprietary Information in violation of the terms
of this paragraph and that any member of the PE Group shall therefore be
entitled to preliminary and/or permanent injunctive relief prohibiting
Executive from engaging in any activity or threatened activity in violation
of the terms of this paragraph and to any other judicial relief available to
them. Inquiries regarding whether specific information constitutes
Proprietary Information shall be directed to PE's Senior Vice President,
Public Policy (or, if such position is vacant, PE's Chief Executive Officer);
provided, that PE shall not unreasonably classify information as Proprietary
Information.
9.2 NON-SOLICITATION OF EMPLOYEES. Executive recognizes that
he or she possesses and will possess confidential information about other
employees of the PE Group, including the Employer, relating to their
education, experience, skills, abilities, compensation and benefits, and
interpersonal relationships with customers of the PE Group. Executive
recognizes that the information he or she possesses and will possess about
these other employees is not generally known, is of substantial value to the
PE Group in developing their business and in securing and retaining
customers, and has been and will be acquired by him or her because of his or
her business position within the PE Group. Executive agrees that, during the
Term of this Agreement and for a period of one(1) year thereafter, he or she
will not, directly or indirectly, solicit or recruit any employee of any
member of the PE Group for the purpose of being employed by him or her or by
any competitor of any member of the PE Group on whose behalf he or she is
acting as an agent, representative or employee and that he or she will not
convey any such confidential information or trade secrets about other
employees of any member of the PE Group to any other person; provided,
however, that it
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shall not constitute a solicitation or recruitment of employment in violation
of this paragraph to discuss employment opportunities with any employee of
any member of the PE Group who has either first contacted Executive or
regarding whose employment Executive has discussed with and received the
written approval of PE's Vice President, Human Resources (or, if such
position is vacant, PE's Chief Executive Officer), prior to making such
solicitation or recruitment. In view of the nature of Executive's employment
with the PE Group, Executive likewise agrees that the members of the PE Group
would be irreparably harmed by any solicitation or recruitment in violation
of the terms of this paragraph and that any such member shall therefore be
entitled to preliminary and/or permanent injunctive relief prohibiting
Executive from engaging in any activity or threatened activity in violation
of the terms of this paragraph and to any other judicial relief available to
them.
9.3 SURVIVAL OF PROVISIONS. The obligations contained in this
Section 9 shall survive the termination or expiration of Executive's
employment within the PE Group and shall be fully enforceable thereafter. If
it is determined by a court of competent jurisdiction in any state that any
restriction in this Section 9 is excessive in duration or scope or is
unreasonable or unenforceable under the laws of that state, it is the
intention of the parties that such restriction may be modified or amended by
the court to render it enforceable to the maximum extent permitted by the law
of that state.
10. MISCELLANEOUS. No provision of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed
to in writing and signed by the Executive and such officer of PE or the
Employer as may be specifically designated by its Board of Directors. No
waiver by either party hereto at any time of any breach by the other party
hereto of, or of any lack of compliance with, any condition or provision of
this Agreement to be performed by such other party shall be deemed a waiver
of similar or dissimilar provisions or conditions at the same or at any prior
or subsequent time. This Agreement supersedes any other agreements or
representations, oral or otherwise, express or implied, with respect to the
subject matter hereof which have been made by either party. The validity,
interpretation, construction and performance of this Agreement shall be
governed by the laws of the State of California. All references to sections
of the Code shall be deemed also to refer to any successor provisions to such
sections. Any payments provided for hereunder shall be paid net of any
applicable withholding required under federal, state or local law and any
additional withholding to which the Executive has agreed. The obligations of
the Executive, the Employer and PE under this
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Agreement which by their nature may require either partial or total
performance after the expiration of the Term (including, without limitation,
those under Sections 2, 3 and 9 hereof) shall survive such expiration.
11. VALIDITY. The invalidity or unenforceability of any provision
of this Agreement shall not affect the validity or enforceability of any
other provision of this Agreement, which shall remain in full force and
effect.
12. POOLING. In the event that the ultimate parent entity of the
PE Group becomes party to a business combination transaction which is
intended to qualify for "pooling of interests" accounting treatment and, but
for one or more provisions of this Agreement, would so qualify, then (A) this
Agreement shall, to the extent practicable, be interpreted so as to permit
such accounting treatment, and (B) to the extent that the application of
clause (A) of this Section 12 does not preserve the availability of such
accounting treatment, then, to the extent that any provision of the Agreement
would disqualify such business combination transaction as a "pooling"
transaction (including, if applicable, the entire Agreement), such provision
shall be null and void as of the Effective Date. All determinations under
this Section 12 shall be made by the accounting firm whose opinion with
respect to "pooling of interests" treatment is required as a condition to the
consummation of such business combination transaction.
13. NO CONTRACT OF EMPLOYMENT. This Agreement shall not be
construed as creating an express or implied contract of employment and,
except as otherwise agreed in writing, the Executive shall not have any right
to be retained in the employ of any member of the PE Group.
14. COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all of
which together shall constitute one and the same instrument.
15. SETTLEMENT OF DISPUTES.
15.1 CLAIMS REVIEW PROCEDURES. All claims by the Executive
for benefits under this Agreement shall be directed to and determined by the
Board of Directors of PE and shall be in writing. Any denial by such board of
a claim for benefits under this Agreement shall be delivered to the Executive
in writing and shall set forth the specific reasons for the denial and the
specific provisions of this Agreement relied upon. Such board shall afford a
reasonable opportunity to the Executive for a review of the decision denying a
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claim and shall further allow the Executive to appeal to such board a
decision of such board within sixty (60) days after notification by such
board that the Executive's claim has been denied.
15.2 ARBITRATION. Except as provided in Section 9, any
further dispute about the validity, interpretation, effect or alleged
violation of this Agreement (an "arbitrable dispute") must be submitted to
arbitration in Los Angeles, 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.
Should any party to this Agreement pursue any arbitrable dispute by any
method other than arbitration, the prevailing 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.
The arbitrator's decision and/or award shall 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.
16. INDEMNIFICATION. Each Employer shall indemnify and hold
Executive harmless for acts and omissions in his or her capacity as an
officer, director, agent or employee of such Employer to the maximum extent
permitted under applicable law, and shall maintain Executive as a covered
insured under any Director and Officer liability insurance policies following
employment until the expiration of any applicable statutes of limitations.
17. DEFINITIONS. For purposes of this Agreement, the
following terms shall have the meanings indicated below:
(A) "Cause" for termination by the Employer of the
Executive's employment shall mean (i) the willful and continued failure by
the Executive to substantially perform the Executive's duties with the
Employer (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 4.1) after a written demand for
substantial performance is delivered to the Executive by the Board of
Directors of PE, which demand specifically identifies the manner in which
such board believes that the Executive has not substantially performed the
Executive's duties, or (ii) Executive's commission of one or
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more acts of dishonesty or moral turpitude (including but not limited to
conviction of a felony). For purpose 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 PE Group.
(B) "Good Reason" for termination by the Executive of the
Executive's employment shall mean the occurrence, without the written consent
of the Executive, of any one of the following acts by the Employer, or
failures by the Employer to act, unless, in the case of any act or failure to
act described in paragraph (I), (II), (III.B) or (VI) below, such act or
failure to act is corrected prior to the Date of Termination specified in the
Notice of Termination given in respect thereof:
(I) the assignment to the Executive of any duties
materially inconsistent with the range of duties and responsibilities
appropriate to a senior executive/officer/key employee within the PE
Group (such range determined by reference to past, current and
reasonably foreseeable practices within the PE Group);
(II) a material reduction in the Executive's overall
standing and responsibilities within the PE Group, but not including (i)
a mere change in title or (ii) a transfer to another member of the PE
Group that in either such case does not adversely affect the Executive's
overall status within the PE Group.
(III) a reduction by the Employer in (A) the Executive's
annual base salary as in effect on the date hereof or as the same may be
increased from time to time or (B) Executive's aggregate compensation
and benefits opportunities, in each case except for across-the-board
reductions (or modifications of benefit plans) similarly affecting all
similarly situated executives/officers/key employees (both of the PE
Group and of any Person then in control of PE) of comparable rank with
the Executive;
(IV) the relocation of the Executive's principal place of
employment to a location outside the Southern California area; the
Employer's requiring the Executive to be based anywhere other than such
principal place of employment (or permitted relocation thereof); or a
substantial increase in Executive's business travel obligations outside
of
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the Southern California area as of the Effective Date, other than such
an increase that (i) arises in connection with extraordinary business
activities of the Employer and (ii) is understood not to be a part of
Executive's regular duties with the Employer;
(V) the failure by the Employer to pay to the Executive
any portion of the Executive's current compensation or to pay the
Executive any portion of an installment of deferred compensation under
any deferred compensation program of the Employer within thirty (30)
days of the date such compensation is due;
(VI) any purported termination of the Executive's
employment which is not effected pursuant to a Notice of Termination
satisfying the requirements of Section 4.1; for purposes of this
Agreement, no such purported termination shall be effective.
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.
(C) "Person" shall have the meaning given in
Section 3(a)(9) of the Securities Exchange Act of 1934, as amended, as
modified and used in Sections 13(d) and 14(d) thereof or any successor
provisions.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date and year first written above.
PACIFIC ENTERPRISES
By:
-----------------------------
Name:
Title:
--------------------------------
EXECUTIVE
Address:
--------------------------------
--------------------------------
--------------------------------
(Please print carefully)
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