Exhibit 10(g)(2)
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement"), effective as of
December 1, 1994 is entered into by and between Xxxxxx Xxxxxxxxx
(the "Employee") and Tucson Electric Power Company, an Arizona
corporation (the "Company").
The Company desires to establish its right to the services
of the Employee, in the capacity described below, on the terms
and conditions, and subject to the rights of termination
hereinafter set forth, and the Employee is willing to accept such
employment on such terms and conditions.
In consideration of the mutual agreements hereinafter set
forth, the Employee and the Company have agreed and do hereby
agree as follows:
1. EMPLOYMENT AS VICE PRESIDENT OF THE COMPANY. The
Company does hereby employ, engage and hire the Employee as
a Vice President of the Company, and the Employee does
hereby accept and agree to such hiring, engagement and
employment. The Employee's duties during the Initial
Employment Period shall include acting as President of a
wholly-owned subsidiary of the Company which will be
responsible for the development and management of
independent power projects. In the event the Company
determines that it will no longer pursue the development of
independent power projects, Employee agrees to perform any
and all other duties and to assume any and all
responsibilities that may be assigned to him from time to
time by the President of the Company, provided, however,
that such duties and responsibilities shall be of a nature
which provides comparable status and compensation to the
Employee. The Employee will devote his full time, energy
and skill to the performance of his duties for the Company
and for the benefit of the Company.
2. INITIAL EMPLOYMENT PERIOD. The Employee shall be
initially employed by the Company for a three-year term,
commencing as of December 1, 1994 and ending on November 30,
1997 (the "Initial Employment Period"), unless sooner
terminated in accordance with the provisions of this
Agreement. Thereafter, the provisions of this Agreement
shall terminate, and the employment of the Employee shall
continue on an "at will" basis.
3. COMPENSATION.
(a) BASE SALARY. The Company shall pay the Employee,
and the Employee agrees to accept from the Company, in
full payment for his services and promises to the
Company, a base salary at the rate of One Hundred
Eighty Thousand Dollars ($180,000.00) per year, payable
in equal biweekly installments or at such other time or
times as the Employee and Company shall agree. This
base salary may be adjusted from time to time by mutual
agreement of the parties.
(b) EMPLOYMENT PAYMENT. In addition to his base
salary, the Company shall pay the Employee a one-time
payment of Sixty Thousand Dollars ($60,000.00) upon the
commencement of his employment with the Company.
(c) ADDITIONAL BENEFITS AND COMPENSATION. In addition
to the compensation set forth above, the Employee shall
receive the benefits set forth in the offer letter
dated November 8, 1994 to the Employee from Xxxxxxx X.
Xxxxxxx, attached hereto as Exhibit A, as well as a
benefit plan to be quantified at a later date, based
upon specific performance objectives. Said benefit
plan will be consistent with programs in the
independent power production industry generally which
consider, for example, development fees, carried
interest, and equity participation. Until such benefit
plan is finalized and implemented, the Employee shall
participate in the annual incentive program referenced
in item (1) of Exhibit A (the "Incentive Program"). At
such time as the benefit plan is finalized and
implemented, Employee's participation in the Incentive
Program shall cease, provided, however, that Employee
shall be entitled to a pro-rata portion of the award
otherwise payable to him under the Incentive Program
for the year in which his participation terminates,
based upon that portion of the year in which he
participated in the Incentive Program.
4. DEATH OR DISABILITY. If the Employee becomes
physically or mentally disabled while employed by the
Company, or if the Employee dies while employed by the
Company, this Agreement shall automatically cease and
terminate. The Company's obligations to the Employee under
this Agreement shall end as of the date of the Employee's
death or, in the case of disability, the Employee's last day
of active employment. The Company's obligations to the
Employee under any compensation or benefit plans shall be
governed by the terms of such plans.
5. TERMINATION BY EMPLOYEE. The Employee shall have the
right to terminate this Employment Agreement at any time.
The Employee agrees to provide the Company with thirty (30)
days prior written notice of any such termination. The
Company's obligation to pay the Employee's compensation
pursuant to this Agreement shall cease as of the Employee's
last day of work. The Company's obligation to the Employee
under any compensation or benefit plans shall be governed by
the terms of such plans.
6. TERMINATION BY THE COMPANY.
(a) TERMINATION FOR CAUSE. The Company may terminate
this Agreement at any time for "cause." The term
"cause" as used herein shall mean:
(1) The failure of the Employee to discharge or
perform his duties and obligations under this Agreement
with due diligence and care;
(2) The refusal of the Employee to implement or
adhere to policies or directives of the Board of
Directors of the Company;
(3) Conduct of a criminal nature which may have
an adverse impact on the Company's reputation and
standing in the community;
(4) Conduct which is in violation of Employee's
common law duty of loyalty to the Company;
(5) Fraudulent conduct in connection with the
business affairs of the Company, regardless of whether
said conduct is designed to defraud the Company or
others; or
(6) Conduct which is in violation of any
provision of this Agreement.
The existence of cause shall be conclusively
determined by the Board of Directors of the Company or
its duly appointed agent. In the event of termination
for cause, the Company's obligation to the Employee
under any compensation or benefit plans shall be
governed by the terms of such plans.
(b) TERMINATION WITHOUT CAUSE. The Company may also
terminate this Employment Agreement without cause, at
any time before the stated termination date of the
Initial Employment Period. If Employee's employment is
terminated pursuant to this Paragraph, however, the
Company shall pay the Employee termination pay, less
required payroll taxes and related deductions, 100% of
the Employee's annual base salary which would have been
paid to the Employee for the remainder of the Initial
Employment Period (the "Termination Amount"). Said
Termination Amount shall be paid in equal monthly
installments, beginning on the first business day of
the calendar month following the Employee's
termination, and shall continue through the final month
of the Initial Employment Period. The Employee shall
not be entitled to any other compensation or benefits
set forth in this Employment Agreement, except as may
be provided under the terms of any separate
compensation or benefit plan or as may be separately
negotiated by the parties and approved by the Board of
Directors in writing in conjunction with the Employee's
termination under this Paragraph. In the event of
termination for cause, the Company's obligation to the
Employee under any compensation or benefit plans shall
be governed by the terms of such plans.
7. EFFECT OF TERMINATION. Upon the proper termination of
this Employment Agreement by the Company for any reason
whatsoever, or upon the termination of this Employment
Agreement by the Employee, this Employment Agreement shall
thereupon be and become void and of no further force or
effect, except that the Covenant Not to Compete set forth in
Section 8 shall survive any said termination and shall
continue to bind the Employee for the period of time stated
therein. Any payment due pursuant to the terms of this
Employment Agreement for services rendered prior to the
termination shall be made as provided in this Employment
Agreement.
8. NON-COMPETITION.
(a) Employee agrees that, during the term of his
employment by the Company, including the Initial
Employment Period, and for a period of one year
thereafter, he will not, directly or indirectly,
without the prior written consent of the Board of
Directors of the Company, provide consultative service
with or without pay, own, manage, operate, join,
control, participate in, or be connected as a
stockholder, partner, or otherwise with, any business,
individual, partner, firm, corporation, or other entity
which is then in competition with the business of the
Company or any affiliate of the Company, relating to
the acquisition, control, servicing, operation, or any
other participation in independent power projects or
other projects in which the Company or any affiliate of
the Company may be engaged during the employment of the
Employee or which may be identified or pursued by the
Company or any affiliate during the employment of the
Employee (collectively, the "IPP Business") .
(b) It is expressly agreed that the Company will or
would suffer irreparable injury if Employee were to
compete with the IPP Business in violation of this
Agreement and that the Company would by reason of such
competition be entitled to injunctive relief in a court
of appropriate jurisdiction. Employee consents and
stipulates to the entry of such injunctive relief in
such a court prohibiting him from competing with the
Company or any subsidiary or affiliate of the Company
in violation of this Agreement.
9. GOVERNING LAW. This Agreement shall be governed in all
respects, whether as to validity, construction, capacity,
performance, or otherwise, by the laws of the State of
Arizona, and no action involving this Agreement may be
brought except in the Superior Court for the State of
Arizona or the Federal District Court for the District of
Arizona. If any provision of this Agreement is held to be
invalid, void or unenforceable for whatever reason, the
remaining provisions not so declared shall nevertheless
continue in full force and effect without being impaired in
any manner whatsoever.
10. WAIVER. Failure to insist upon strict compliance with
any of the terms, covenants or conditions hereof shall not
be deemed a waiver of such term, covenant or condition, nor
shall any waiver or relinquishment of, or failure to insist
upon strict compliance with, any right or power hereunder at
any one or more times be deemed a waiver or relinquishment
of such right or power at any other time or times.
IN WITNESS WHEREOF, the Company has caused this Agreement to
be executed by its duly authorized officer, and the Employee has
hereunto signed this Agreement, on the 1st day of December, 1994.
TUCSON ELECTRIC POWER COMPANY
By /s/X. X. Xxxxxxxxxx
---------------------
Its Senior Vice President
/s/ Xxxxxx Xxxxxxxxx
---------------------
Exhibit A
November 8, 1994
Xx. Xxxxxx Xxxxxxxxx
0000 Xxxxxxxx Xxxxx
Xxxxxx Xxxx, XX 00000
Dear Xxxxxx:
Following the Board of Directors meeting held on November 4,
1994, we are pleased to extend an offer to you for the position
of Vice President at an annual salary of $180,000. This position
also contemplates your election to the position of President of a
TEP subsidiary (reporting directly to Xxx Xxxxxxxxxx) which will
be responsible for the development of independent power projects.
Additionally, this offer includes a one-time payment of $60,000
upon commencement of employment.
In addition to the annual salary, the following benefits
will be provided:
(1) Participation in the annual incentive program
(commencing in 1995);
(2) Participation in grants of stock options pursuant
to the 1994 Omnibus Plan (commencing in 1995);
(3) Annual vacation of 25 days;
(4) Ten (10) paid holidays annually;
(5) Salaried Employees Retirement Plan;
(6) Triple Investment Plan 401(k);
(7) Business Travel Accident Insurance (this Plan
provides coverage in addition to any other life and
accident insurance you may have);
(8) Group Life and Medical/Dental Plans (you may elect
either the self-funded plan at no cost to you or
certain other optional plans which require employee
contributions);
(9) A Company-provided vehicle; and
(10) Employment Agreement (Change of Control).
In the event you relocate to Tucson, you will be reimbursed
your expenses in accordance with the Company's standard
relocation policy.
This offer of employment is conditioned upon a mutually
satisfactory Employment Agreement (separate from Item 10 above)
containing the provisions set forth in Exhibit A.
Xx. Xxxxxx Xxxxxxxxx
November 8, 1994
Page 2
This offer of employment is also conditioned upon the
successful completion of the Company's normal application
process, including the preemployment physical examination.
Please contact us at your earliest convenience so we can
proceed with the finalization of this employment proposal.
Yours very truly,
Xxxxxxx X. Xxxxxxx
CEB:lfb
cc: X. X. Xxxxxxxxxx
EMPLOYMENT AGREEMENT (INDEPENDENT POWER BUSINESS)
Effective Date December 1, 1994
Term Three years
Payment In the
event the Company
determines to discontinue
pursuit of independent
power business and no
position of equivalent pay
and status is made
available, a payment shall
be made equal to three
years salary less any
amounts previously paid as
salary as of the date of
termination
Non-Compete Clause Following
termination for any reason,
no competitive activities
for a period of one year
following termination date
Exhibit A
