EXHIBIT 10(a)
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT ("Agreement"
herein) by and between HOUSTON INDUSTRIES INCORPORATED, a Texas
corporation (said corporation, together with its successors and assigns
permitted under this Agreement, hereinafter referred to as the
"Company"), and DON D. JORDAN (the "Executive"), dated this 6th day of
June, 1994.
W I T N E S S E T H:
WHEREAS, on May 12, 1994, the Company and Executive entered
into an Employment Agreement (the "Prior Agreement") under which
Executive would receive certain employment rights and benefits upon a
"Change of Control" (as defined therein); and
WHEREAS, the parties to said Prior Agreement desire to
completely amend and restate said Prior Agreement so that the Company
shall have the option to benefit from the continued services of
Executive beyond his attainment of age 65 and Executive has consented
to make himself available to be so employed; and
WHEREAS, Section 15(A) of the Prior Agreement authorizes the
amendment of said Agreement with the mutual consent of the parties and
the parties desire to so amend and restate the Prior Agreement;
NOW, THEREFORE, in consideration and mutual covenants and
agreements herein contained, the parties hereto agree that the Prior
Agreement shall be amended and restated in its entirety to read as
follows (the Prior Agreement as so amended and restated being
hereinafter called "this Agreement"):
PART A
CHANGE OF CONTROL PERIOD
The Board of Directors of the Company (the "Board") has
determined that it is in the best interests of the Company and its
shareholders to assure that the Company will have the continued
dedication of the Executive, notwithstanding the possibility, threat or
occurrence of a Change of Control (as defined below) of the Company.
The Board believes it is imperative to diminish the inevitable
distraction of the Executive by virtue of the personal uncertainties
and risks created by a pending or threatened Change of Control and to
encourage the Executive's full attention and dedication to the Company
in the event of any threatened or pending Change of Control, and to
provide the Executive with compensation and benefits arrangements upon
a Change of Control which ensure that the compensation and benefits
expectations of the Executive will be satisfied and which are
competitive with those of other corporations. Therefore, in order to
accomplish these objectives, the Board has caused the Company to enter
into this Agreement.
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1. CERTAIN DEFINITIONS:
A. "AFFILIATED COMPANIES" shall mean and include any
company controlled by, controlling or under common control with the
Company within the meaning of Section 414(o) of the Code.
B. "ANNUAL BASE SALARY" shall mean the salary of the
Executive provided for in Section 4(B)(i) below, as adjusted and in
effect from time to time.
C. "BENEFICIARY" shall mean the person or persons named in
writing and filed with the Company to receive any compensation or
benefit payable hereunder following Executive's death, or in the event
no such person is named or survives the Executive, his estate. In the
event of the Executive's death or a judicial determination of his
incompetence, reference in this Agreement to the Executive shall be
deemed, where appropriate, to refer to his Beneficiary, estate or other
legal representative.
D. "BOARD" shall mean the Board of Directors of the
Company.
E. "CAUSE" shall mean those specific reasons for
Executive's termination of employment as specified in Section 5(B)
hereof.
F. "CHANGE OF CONTROL" shall have the meaning ascribed to
it in Section 2 hereof.
G. "CHANGE OF CONTROL PERIOD" shall mean the period
commencing on the date hereof and ending on the first day of the month
next following the Executive's retirement on or after his Normal
Retirement Date under the Company's tax-qualified retirement plan or
any successor retirement plan (the "Retirement Plan").
H. "CODE" shall mean the Internal Revenue Code of 1986, as
now in effect and as hereafter amended.
I. "DISABILITY" shall mean the absence of the Executive
from Executive's duties with the Company on a full-time basis for 180
consecutive business days as a result of incapacity due to mental or
physical illness which is determined to be total and permanent by a
physician selected by the Company or its insurers and acceptable to
Executive or Executive's legal representative. Such agreement as to
acceptability by the Executive not to be withheld unreasonably.
J. "EFFECTIVE DATE" shall mean the first date during the
Change of Control Period (as defined in Section 1(G)) on which a Change
of Control occurs. Anything in this Agreement to the contrary
notwithstanding, if a Change of Control occurs and if the Executive's
employment with the Company is terminated or the Executive ceases to be
an officer of the Company prior to the date on which the Change of
Control occurs, and if it is reasonably demonstrated by the Executive
that such termination of employment or cessation of status as a officer
(i) was at the request of a third party who has taken steps reasonably
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calculated to effect the Change of Control or (ii) otherwise arose in
connection with or anticipation of the Change of Control, then for all
purposes of this Agreement, the "Effective Date" shall mean the date
immediately prior to the date of such termination of employment or
cessation of status as an officer.
K. "EMPLOYMENT PERIOD" shall mean the period commencing on
the Effective Date and ending on the date described in Section 3.
L. "SPOUSE" shall mean the person who is legally married to
the Executive.
2. CHANGE OF CONTROL: For the purpose of this Agreement, a
"Change of Control" shall be deemed to have occurred if:
(a) any "person," including a "group" as determined in
accordance with Section 13(d)(3) of the Securities Exchange Act of
1934 (the "Exchange Act"), is or becomes the beneficial owner,
directly or indirectly, of securities of the Company representing
30% or more of the combined voting power of the Company's then
outstanding securities;
(b) as a result of, or in connection with, any tender offer or
exchange offer, merger or other business combination, sale of assets or
contested election, or any combination of the foregoing transactions
(a "Transaction"), the persons who were directors of the Company before
the Transaction shall cease to constitute a majority of the Board of
Directors of the Company or any successor to the Company;
(c) the Company is merged or consolidated with another
corporation and as a result of such merger or consolidation less than
70% of the outstanding voting securities of the surviving or resulting
corporation shall then be owned in the aggregate by the former
stockholders of the Company, other than (x) affiliates within the
meaning of the Exchange Act, or (y) any party to such merger or
consolidation;
(d) a tender offer or exchange offer is made and consummated for
the ownership of securities of the Company representing 30% or more of
the combined voting power of the Company's then outstanding voting
securities; or
(e) the Company transfers substantially all of its assets to
another corporation which is not a wholly owned subsidiary of the
Company;
provided, however, that unless the Board of Directors of the
Company determines otherwise prior to the date of any event
described in the foregoing clauses (a) - (e) above ("Event"),
a "Change of Control" shall not have occurred if any Event
results, directly or indirectly, in the beneficial ownership
by the employees, former employees or members of the Board of
Directors of the Company of:
(x) substantially all of the assets of
the Company; or
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(y) securities of the Company
representing 30% or more of the combined voting
power of the outstanding securities of the Company
or any successor to the Company.
3. EMPLOYMENT PERIOD: The Company hereby agrees to continue the
Executive in its employ, and the Executive hereby agrees to remain in
the employ of the Company, in accordance with the terms and provisions
of this Agreement, for the period commencing on the Effective Date and
ending on the earlier to occur of (i) the fifth anniversary of such
Effective Date or (ii) the first day of the month coinciding with or
next following the Executive's attainment of age 67.
4. TERMS OF EMPLOYMENT:
A. POSITION AND DUTIES:
(i) During the Employment Period and until the
date of his termination of employment hereunder, the
Executive shall be employed as the Chairman and Chief
Executive Officer of the Company and be responsible for the
general management of the affairs of the Company; provided,
however, that the Executive may upon agreement of the parties
relinquish the office of Chief Executive Officer of the
Company. Executive shall, however, at all times remain
employed as Chairman of the Board. It is the intention of
the parties that during the Employment Period the Executive
shall continue to be elected to and serve on the Board as its
Chairman. The Executive, in carrying out his duties under
this Agreement, shall report only to the Board. During the
Employment Period, (a) the Executive's position (including
status, offices, titles and reporting requirements),
authority, duties and responsibilities shall be at least
commensurate in all material respects with the most
significant of those held, exercised and assigned at any time
during the 90-day period immediately preceding the Effective
Date, except as otherwise provided immediately above and
(b) the Executive's services shall be performed at the
location where the Executive was employed immediately
preceding the Effective Date or any office which is the
headquarters of the Company and is less than 250 miles from
such location. It is hereby agreed and understood that
Executive may be required by the Company to move his business
office (within the 250-mile limit set forth above) but not
his principle place of residence. In the event that the
Company requires Executive to move his main office outside of
Harris County, the Company shall provide, at no expense to
Executive, an apartment or townhome in the new location which
is commensurate with Executive's standard of living.
(ii) During the Employment Period, and excluding
any periods of vacation and sick leave to which the Executive
is entitled, the Executive agrees to devote reasonable
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 hereunder, to use the Executive's reasonable best
efforts to perform faithfully and efficiently such
responsibilities. During the Employment Period it shall not
be a violation of this
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Agreement for the Executive to (a) serve on corporate, civic
or charitable boards or committees, (b) deliver lectures,
fulfill speaking engagements or teach at educational
institutions and (c) manage personal investments, so long as
such activities do not significantly interfere with the
performance of the Executive's responsibilities as an
employee of the Company in accordance with this Agreement.
It is expressly understood and agreed that to the extent that
any such activities have been conducted by the Executive
prior to the Effective Date, the continued conduct of such
activities (or the conduct of activities similar in nature
and scope thereto) subsequent to the Effective Date shall not
thereafter be deemed to interfere with the performance of the
Executive's responsibilities to the Company.
B. COMPENSATION:
(i) ANNUAL BASE SALARY: During the Employment
Period, the Executive shall receive an Annual Base Salary at
a monthly rate at least equal to the highest monthly base
salary paid to the Executive by the Company during the
12-month period immediately preceding the month in which the
Effective Date occurs. Thereafter, the Annual Base Salary
shall increase by not less than 5% each year (unless a
smaller percentage is agreed upon between the parties) with
the increases being effective on the same date that similar
salary changes are effective for other members of the senior
group of executives of the Company. During the Employment
Period and subject to the provisions of the preceding
sentence, the Annual Base Salary shall be reviewed at least
annually and shall be increased at any time and from time to
time as shall be substantially consistent with increases in
base salary generally awarded in the ordinary course of
business to other peer executives of the Company and its
Affiliated Companies. Any increase in Annual Base Salary
shall not serve to limit or reduce any other obligation to
the Executive under this Agreement. Annual Base Salary shall
not be reduced after any such increase and the term Annual
Base Salary as utilized in this Agreement shall refer to
Annual Base Salary as so increased.
(ii) ANNUAL BONUS: In addition to Annual Base
Salary, the Executive shall be awarded, for each fiscal year
ending during the Employment Period, an annual bonus
(the "Annual Bonus") in cash and/or common stock of the
Company as determined in accordance with the existing bonus
plans of the Company, the Executive Incentive Compensation
Plan ("EICP") and the Long-Term Incentive Compensation Plan
("LICP"), or any successor plan or plans, if any successor of
the Company has a superior bonus plan or plans. Each such
Annual Bonus shall be in an amount not less than the greater
of (1) 125% of Annual Base Salary or (2) the bonus payable to
the Executive for the applicable year under the EICP and LICP
or said successor superior plan assuming that any performance
objectives thereunder had been met at the "target" level;
and, such Annual Bonus shall be paid at the same time or
times as similar bonuses are paid to other peer executives of
the Company, unless the Executive shall elect to defer the
receipt of such Annual Bonus. For all
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purposes of this Agreement, "Annual Bonus" shall be deemed to
include but not necessarily limited to the aggregate of
(a) cash paid during a given year under the EICP for
short-term annual awards thereunder and (b) the dollar value
of shares of the Company's common stock paid out during a
given year under the LICP based on the achievement of certain
performance goals, plus dividend equivalent accruals during
the performance period.
(iii) INCENTIVE, SAVINGS AND RETIREMENT
PLANS: During the Employment Period, the Executive shall be
entitled to participate in all incentive, savings and
retirement plans, practices, policies and programs applicable
generally to other peer executives of the Company and its
Affiliated Companies, but in no event shall such plans,
practices, policies and programs provide the Executive with
incentive opportunities (measured with respect to both
regular and special incentive opportunities, to the extent,
if any, that such distinction is applicable), savings
opportunities and retirement benefit opportunities, in each
case, less favorable, in the aggregate, than the most
favorable of those provided by the Company and its Affiliated
Companies for the Executive under such plans, practices,
policies and programs as in effect at any time during the
90-day period immediately preceding the Effective Date or if
more favorable to the Executive, those provided generally at
any time after the Effective Date to other peer executives of
the Company and its Affiliated Companies.
(iv) WELFARE BENEFIT PLANS: During the Employment
Period, the Executive and/or the Executive's family, as the
case may be, shall be eligible for participation in and shall
receive all benefits under welfare benefit plans, practices,
policies and programs provided by the Company and its
Affiliated Companies (including, without limitation, medical,
prescription, dental, disability, executive salary
continuance, employee life, group life, accidental death and
travel accident insurance plans and programs) to the extent
applicable generally to other peer executives of the Company
and its Affiliated Companies, but in no event shall such
plans, practices, policies and programs provide the Executive
with benefits which are less favorable, in the aggregate,
than the most favorable of such plans, practices, policies
and programs in effect for the Executive at any time during
the 90-day period immediately preceding the Effective Date
or, if more favorable to the Executive, those provided
generally at any time after the Effective Date to other peer
executives of the Company and its Affiliated Companies.
(v) EXPENSES: During the Employment Period, the
Executive shall be entitled to receive prompt reimbursement
for all reasonable expenses incurred by the Executive in
accordance with the most favorable policies, practices and
procedures of the Company and its Affiliated Companies in
effect for the Executive at any time during the 90-day period
immediately preceding the Effective Date or, if more
favorable to the Executive, as in effect generally at any
time thereafter with respect to other peer executives of the
Company and its Affiliated Companies.
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(vi) FRINGE BENEFITS: During the Employment
Period, the Executive shall be entitled to fringe benefits in
accordance with the most favorable plans, practices, programs
and policies of the Company and its Affiliated Companies in
effect for the Executive at any time during the 90-day period
immediately preceding the Effective Date or, if more
favorable to the Executive, as in effect generally at any
time thereafter with respect to other peer executives of the
Company and its Affiliated Companies.
(vii) OFFICE AND SUPPORT STAFF: During the
Employment Period, the Executive shall be entitled to an
office or offices of a size and with furnishings and other
appointments, and to exclusive personal secretarial and other
assistance, at least equal to the most favorable of the
foregoing provided to the Executive by the Company and its
Affiliated Companies at any time during the 90-day period
immediately preceding the Effective Date or, if more
favorable to the Executive, as provided generally at any time
thereafter with respect to other peer executives of the
Company and its Affiliated Companies.
(viii) VACATION: During the Employment Period,
the Executive shall be entitled to paid vacation in
accordance with the most favorable plans, policies, programs
and practices of the Company and its Affiliated Companies as
in effect for the Executive at any time during the 90-day
period immediately preceding the Effective Date or, if more
favorable to the Executive, as in effect generally at any
time thereafter with respect to other peer executives of the
Company and its Affiliated Companies.
(ix) OTHER PERQUISITES: During the Employment
Period, the Executive shall continue to be provided with such
perquisites as were provided to the Executive on the
Effective Date of this Agreement. Such perquisites shall be
reviewed annually by the Personnel Committee of the Board.
In addition, the Executive shall be entitled to reimbursement
for expenses incurred with respect to the preparation of his
personal income tax returns and for financial counseling in
an amount not to exceed $10,000 per calendar year.
5. TERMINATION OF EMPLOYMENT:
A. DEATH OR DISABILITY: The Executive's employment shall
terminate automatically upon the Executive's death during the
Employment Period. If the Company determines in good faith that the
Disability of the Executive has occurred during the Employment Period,
it may give to the Executive written notice in accordance with
Section 15(B) of this Agreement of its intention to terminate the
Executive's employment. In such event, the Executive's employment with
the Company shall terminate effective on the 30th day after receipt of
such notice by the Executive (the "Disability Effective Date"),
provided that, within the 30 days after such receipt, the Executive
shall not have returned to full-time performance of the Executive's
duties.
B. CAUSE: The Company may terminate the Executive's
employment during the Employment Period for Cause. For purposes of
this Agreement, "Cause" shall mean
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(i) repeated violations by the Executive of the Executive's obligations
under Section 4(A) of this Agreement (other than as a result of
incapacity due to physical or mental illness) which are demonstrably
willful and deliberate on the Executive's part, which are committed in
bad faith or without reasonable belief that such violations are in the
best interests of the Company and which are not remedied in a
reasonable period of time after receipt of written notice from the
Company specifying such violations or (ii) the conviction of the
Executive of a felony involving moral turpitude.
C. GOOD REASON: The Executive's employment may be
terminated during the Employment Period by the Executive for Good
Reason. For purposes of this Agreement, "Good Reason" shall mean:
(i) the assignment to the Executive of any duties
inconsistent in any respect with the Executive's position
(including status, offices, titles and reporting
requirements), authority, duties or responsibilities as
contemplated by Section 4(A) of this Agreement, or any other
action by the Company which results in a diminution in such
position, authority, duties or responsibilities, excluding
for this purpose an isolated, insubstantial and inadvertent
action not taken in bad faith and which is remedied by the
Company promptly after receipt of notice thereof given by the
Executive;
(ii) any failure by the Company to comply with any
of the provisions of Section 4(B) of this Agreement, other
than an isolated, insubstantial and inadvertent failure not
occurring in bad faith and which is remedied by the Company
promptly after receipt of notice thereof given by the
Executive;
(iii) the Company's requiring the Executive to
be based at any office or location other than that described
in Section 4(A)(i) hereof or the Company's failure to provide
the residence required by Section 4(A)(i);
(iv) any purported termination by the Company of
the Executive's employment otherwise than as expressly
permitted by this Agreement; or
(v) any failure by the Company to comply with and
satisfy Section 11(C) of this Agreement, provided that such
successor has received at least ten days' prior written
notice from the Company or the Executive of the requirements
of Section 11(C) of this Agreement.
For purposes of this Section 5(C), any good faith determination of
"Good Reason" made by the Executive shall be conclusive.
D. NOTICE OF TERMINATION: Any termination by the Company
for Cause, or by the Executive for Good Reason, shall be communicated
by Notice of Termination to the other party hereto given in accordance
with Section 15(B) of this Agreement. For purposes of this Agreement,
a "Notice of Termination" means a written notice which (i) indicates
the
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specific termination provision in this Agreement relied upon, (ii) to
the extent applicable, sets 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 and (iii) if
the Date of Termination (as defined below) is other than the date of
receipt of such notice, specifies the termination date (which date
shall be not more than 15 days after the giving of such notice). The
failure by the Executive or the Company to set forth in the Notice of
Termination any fact or circumstance which contributes to a showing of
Good Reason or Cause shall not waive any right of the Executive or the
Company hereunder or preclude the Executive or the Company from
asserting such fact or circumstance in enforcing the Executive's or the
Company's rights hereunder.
E. DATE OF TERMINATION: "Date of Termination" means (i) if
the Executive's employment is terminated by the Company for Cause, or
by the Executive for Good Reason, the date of receipt of the Notice of
Termination or any later date specified therein, as the case may be,
(ii) if the Executive's employment is terminated by the Company other
than for Cause or Disability, the Date of Termination shall be the date
on which the Company notifies the Executive of such termination and
(iii) if the Executive's employment is terminated by reason of death or
Disability, the Date of Termination shall be the date of death of the
Executive or the Disability Effective Date, as the case may be.
6. OBLIGATIONS OF THE COMPANY UPON TERMINATION:
A. GOOD REASON, OTHER THAN FOR CAUSE, DEATH OR
DISABILITY: If, during the Employment Period, the Company shall
terminate the Executive's employment other than for Cause or Disability
or the Executive shall terminate employment for Good Reason, then:
(i) the Company shall pay to the Executive in a
lump sum in cash (or common stock of the Company with respect
to certain payments under LICP), within 30 days after the
Date of Termination, the aggregate of (1) the Executive's
Annual Base Salary and Annual Bonus remaining owing to the
Executive for the Employment Period as if there had been no
termination determined without any reduction for the present
value of such lump-sum payment and (2) any accrued vacation
pay, in each case to the extent not theretofore paid (the sum
of the amounts described in clauses (1) and (2) above shall
be hereinafter referred to as the "Accrued Obligations");
(ii) the benefits accrued up to the Date of
Termination under the Retirement Plan and the Benefit
Restoration Plan of the Company or any successor plan thereto
("SERP" herein) shall commence immediately thereunder in such
form as elected by the Executive in accordance with the terms
of said Plans and, notwithstanding any provision of the SERP
to the contrary, the Company and the Board hereby agree to
cause the SERP to be administered so that no benefit payable
under the SERP may be commuted and paid in a lump sum by the
Company;
(iii) the Company shall pay a separate monthly
supplemental retirement benefit equal to the difference
between (1) the benefit payable under
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the Retirement Plan and the SERP or any other successor
supplemental and/or excess retirement plan of the Company and
its Affiliated Companies providing benefits for the Executive
which the Executive would receive if the Executive's
employment continued at the compensation level provided for
in Sections 4(B)(i) and 4(B)(ii) of this Agreement for the
remainder of the Employment Period, assuming for this purpose
that all accrued benefits are fully vested and that benefit
accrual formulas and actuarial assumptions are no less
advantageous to the Executive than those in effect during the
90-day period immediately preceding the Effective Date, and
(2) the Executive's actual benefit (paid or payable), if any,
under the Retirement Plan and the SERP (the amount of such
benefit calculated under this Section 6(A)(iii) which shall
commence at the same time and be payable in the same form as
the amounts described in Section 6(A)(ii) shall be
hereinafter referred to as the "Supplemental Retirement
Benefit");
(iv) for the remainder of the Employment Period, or
such longer period as any plan, program, practice or policy
may provide, the Company shall continue benefits to the
Executive and/or the Executive's family at least equal to
those which would have been provided to them in accordance
with the plans, programs, practices and policies described in
Section 4(B)(iv) of this Agreement if the Executive's
employment had not been terminated in accordance with the
most favorable plans, practices, programs or policies of the
Company and its Affiliated Companies as in effect and
applicable generally to other peer executives and their
families during the 90-day period immediately preceding the
Effective Date or, if more favorable to the Executive, as in
effect generally at any time thereafter with respect to other
peer executives of the Company and its Affiliated Companies
and their families; provided, however, that if the Executive
becomes reemployed with another employer and is eligible to
receive medical or other welfare benefits under another
employer provided plan, the medical and other welfare
benefits described herein shall be secondary to those
provided under such other plan during such applicable period
of eligibility (such continuation of such benefits for the
applicable period herein set forth shall be hereinafter
referred to as "Welfare Benefit Continuation"). For purposes
of determining eligibility of the Executive for retiree
benefits pursuant to such plans, practices, programs and
policies, the Executive shall be considered to have remained
employed until the end of the Employment Period and to have
retired on the last day of such period;
(v) to the extent not theretofore paid or
provided, the Company shall timely pay or provide to the
Executive and/or the Executive's family any other amounts or
benefits required to be paid or provided or which the
Executive and/or the Executive's family is eligible to
receive pursuant to this Agreement and under any plan,
program, policy or practice or contract or agreement of the
Company and its Affiliated Companies as in effect and
applicable generally to other peer executives and their
families during the 90-day period immediately preceding the
Effective Date or, if more favorable to the Executive, as in
effect generally thereafter with respect to other peer
executives
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of the Company and its Affiliated Companies and their
families (such other amounts and benefits shall be
hereinafter referred to as the "Other Benefits"); provided,
however, that the Company and the Board hereby agree to cause
the Deferred Compensation Plan to be administered so that any
and all amounts of salary and/or bonus theretofore deferred
by Executive and held under the Deferred Compensation Plan of
the Company with instructions from Executive to pay in 15
annual installments shall be paid in said 15 installments
commencing at the end of the Employment Period and shall not
be commuted and paid in a lump sum, notwithstanding any
provision of the Deferred Compensation Plan to the contrary;
and
(vi) the Company shall pay to Executive in a lump sum in
cash, within 30 days after the Date of Termination, the
amount it would have contributed as an employer contribution
to the tax-qualified Savings Plan of the Company for the
remainder of the Employment Period had Executive contributed
at the maximum rate during said period and had the terms of
said Savings Plan as in effect on the Effective Date remained
unchanged during said remainder of the Employment Period.
B. DEATH: If the Executive's employment is terminated by
reason of the Executive's death during the Employment Period, this
Agreement shall terminate without further obligations to the
Executive's Beneficiary or other legal representatives under this
Agreement, other than for (i) payment of Accrued Obligations (which
shall be paid to the Executive's Beneficiary in a lump sum in cash (or
common stock of the Company with respect to certain payments under
LICP) within 30 days of the Date of Termination) and the timely payment
or provision of the Welfare Benefit Continuation and Other Benefits and
(ii) payment to the Executive's Beneficiary in a lump sum in cash
within 30 days of the Date of Termination of an amount equal to the
actuarial equivalent (utilizing for this purpose the assumptions
utilized with respect to the Retirement Plan on the Effective Date) of
the Supplemental Retirement Benefit.
C. DISABILITY: If the Executive's employment is terminated
by reason of the Executive's Disability during the Employment Period,
this Agreement shall terminate without further obligations to the
Executive under this Agreement, other than for (i) payment of Accrued
Obligations (which shall be paid to the Executive in a lump sum in cash
(or common stock of the Company with respect to certain payments under
LICP) within 30 days of the Date of Termination) and the timely payment
or provision of the Welfare Benefit Continuation and Other Benefits and
(ii) payment to the Executive in a lump sum in cash within 30 days of
the Date of Termination of an amount equal to the actuarial equivalent
(utilizing for this purpose the assumptions utilized with respect to
the Retirement Plan on the Effective Date) of the Supplemental
Retirement Benefit.
D. CAUSE; OTHER THAN FOR GOOD REASON: If the Executive's
employment shall be terminated for Cause during the Employment Period
or if the Executive terminates employment during the Employment Period,
excluding a termination for Good Reason or by reason of death or
Disability, this Agreement shall terminate without further obligations
to the Executive other than the obligation to pay to Executive the
Annual Base Salary through the
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Date of Termination plus the amount of any compensation previously
deferred by the Executive, in each case to the extent theretofore
unpaid, and the timely provision of Other Benefits. In such case, any
unpaid but due Annual Base Salary shall be paid to the Executive in a
lump sum in cash within 30 days of the Date of Termination.
E. GROUP LIFE INSURANCE: Upon a termination of employment
during or at the end of the Employment Period for any reason other than
death or for Cause, the Executive may elect to retain the group life
insurance coverage provided to Executive and other employees of the
Company under the Group Life Insurance Plan of the Company, and, if the
election is made, Executive shall pay, or reimburse the Company for the
cost of, the premiums for such insurance paid by the Company at the
same rate charged active employees of the Company for similar coverage
utilizing the same method or procedure for calculating the premium as
in effect and applicable for Executive as of the date of execution
hereof. Such right to maintain group coverage shall be in the minimum
amount of three times Annual Base Salary and shall continue for the
life of Executive. It is hereby understood and agreed that there shall
be no increase in said premium because of any reallocation due to age
or risk that may occur after the date of execution hereof.
F. RETIREMENT: If Executive terminates his employment with
the Company by reason of retirement with the consent of the Company
during the Employment Period, he shall be entitled to receive under
this Agreement, in addition to all other benefits otherwise due from
the Company upon retirement, the prompt payment of all benefits due
under Section 6(A) had the Executive terminated employment for Good
Reason. Furthermore, Executive shall be entitled until the end of the
Employment Period to the prompt reimbursement of all expenses incurred
for civic or industry activities undertaken on behalf of the Company
which are of a similar nature and scope to those expenses reimbursable
by the Company to Executive on the Effective Date. In this connection,
Executive shall also be afforded reasonable use of any Company
aircraft.
G. OFFICE: Upon a termination of employment during the
Employment Period for any reason other than death or for Cause, the
Company shall provide Executive with suitable executive office space
and secretarial help at an acceptable location outside the premises of
any Company location. Such office and secretary shall be provided
Executive until such time as mutually agreed by the parties to be no
longer necessary.
H. SALARY CONTINUATION PLAN: Upon a termination of
employment during the Employment Period for any reason, the Company
hereby agrees that Executive shall be fully vested in the benefit
provided under the Salary Continuation Plan, as in effect on the
Effective Date, and that the benefit payable thereunder shall be based
on his Annual Base Salary as provided in Section 4(B)(i).
7. NON-EXCLUSIVITY OF RIGHTS: Except as provided in Section 6
of this Agreement, nothing in this Agreement shall prevent or limit the
Executive's continuing or further participation in any plan, program,
policy or practice provided by the Company or any of its Affiliated
Companies and for which the Executive may qualify, nor shall anything
herein limit or otherwise affect such rights as the Executive may have
under any contract or agreement with the Company or any of its
Affiliated Companies. Amounts which are vested benefits or which
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the Executive is otherwise entitled to receive under any plan,
policy, practice or program of or any contract or agreement with the
Company or any of its Affiliated Companies at or subsequent to the Date
of Termination shall be payable in accordance with such plan, policy,
practice or program or contract or agreement except as explicitly
modified by this Agreement.
8. FULL SETTLEMENT; RESOLUTION OF DISPUTES:
A. 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. In no event shall the
Executive be obligated to seek other employment or take any other
action by way of mitigation of the amounts payable to the Executive
under any of the provisions of this Agreement and, except as provided
in Section 6(A)(iv) of this Agreement, such amounts shall not be
reduced whether or not the Executive obtains other employment. The
Company agrees to pay promptly as incurred, to the full extent
permitted by law, all legal fees and expenses which the Executive may
reasonably incur as a result of any contest (regardless of the outcome
thereof) by the Company, the Executive or others of the validity or
enforceability of, or liability under, any provision of this Agreement
or any guarantee of performance thereof (including as a result of any
contest by the Executive about the amount of any payment pursuant to
this Agreement), plus in each case interest on any delayed payment at
the applicable Federal rate provided for in Section 7872(f)(2)(A) of
the Code. In addition and to the extent not already provided by the
terms of any insurance policy owned by the Company, the Company hereby
agrees to pay promptly as incurred, to the full extent permitted by
law, all legal fees and expenses which the Executive may reasonably
incur as a result of any litigation or other legal action filed against
the Executive or his estate arising out of, or in any way connected
with or resulting from, actions taken or omitted to be taken by
Executive during his employment with the Company.
B. If there shall be any dispute between the Company and
the Executive (i) in the event of any termination of the Executive's
employment by the Company, whether such termination was for Cause, or
(ii) in the event of any termination of employment by the Executive,
whether Good Reason existed, then, unless and until there is a final,
nonappealable judgment by a court of competent jurisdiction declaring
that such termination was for Cause or that the determination by the
Executive of the existence of Good Reason was not made in good faith,
the Company shall pay all amounts, and provide all benefits, to the
Executive and/or the Executive's family or other beneficiaries, as the
case may be, that the Company would be required to pay or provide
pursuant to Section 6(A) hereof as though such termination were by the
Company without Cause or by the Executive with Good Reason; provided,
however, that the Company shall not be required to pay any disputed
amounts pursuant to this paragraph except upon receipt of an
undertaking by or on behalf of the Executive to repay all such amounts
to which the Executive is ultimately adjudged by such court not to be
entitled.
9. CERTAIN ADDITIONAL PAYMENTS BY THE COMPANY:
A. Anything in this Agreement to the contrary
notwithstanding, in the event it shall be determined that any payment
or distribution by the Company to or for benefit of the
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Executive (whether paid or payable or distributed or distributable
pursuant to the terms of this Agreement or otherwise, but determined
without regard to any additional payments required under this
Section 9) (a "Payment") would be subject to the excise tax imposed by
Section 4999 of the Code or any interest or penalties are incurred by
the Executive 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 the Executive shall
be entitled to receive an additional payment (a "Gross-Up Payment") in
an amount such that after payment (whether through withholding at the
source or otherwise) by the Executive of all taxes (including any
interest or penalties imposed with respect to such taxes), including,
without limitation, any income taxes (and any interest and penalties
imposed with respect thereto), employment taxes and Excise Tax imposed
upon the Gross-Up Payment, the Executive retains an amount of the
Gross-Up Payment equal to the Excise Tax imposed upon the Payments.
B. Subject to the provisions of Section 9(C), all
determinations required to be made under this Section 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 Deloitte & Touche (the "Accounting
Firm") which shall provide detailed supporting calculations both to the
Company and the Executive within 15 business days of the receipt of
notice from the Executive that there has been a Payment, or such
earlier time as is requested by the Company. In the event that the
Accounting Firm is serving as accountant or auditor for the individual,
entity or group effecting the Change of Control, the Executive shall
appoint another nationally recognized accounting firm to make the
determinations required hereunder (which accounting firm shall then be
referred to as the Accounting Firm hereunder). All fees and expenses
of the Accounting Firm shall be borne solely by the Company. Any
Gross-Up Payment, as determined pursuant to this Section 9, shall be
paid by the Company to the Executive within five days of the receipt of
the Accounting Firm's determination. If the Accounting Firm determines
that no Excise Tax is payable by the Executive, it shall furnish the
Executive with a written opinion that failure to report the Excise Tax
on the Executive's applicable federal income tax return would not
result in the imposition of a negligence or similar penalty. Any
determination by the Accounting Firm shall be binding upon the Company
and the Executive. 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(C) and the Executive thereafter is required to
make a payment of any 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 the Executive.
C. The Executive shall notify the Company in writing of any
claim by the Internal Revenue Service that, if successful, would
require the payment by the Company of the Gross-Up Payment. Such
notification shall be given as soon as practicable but no later than
ten business days after the Executive is informed in writing of such
claim and shall apprise the Company of the nature of such claim and the
date on which such claim is requested to be paid. The Executive shall
not pay such claim prior to the expiration of the 30-day period
following the date on which it gives such notice to the Company (or
such shorter period ending on the
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date that any payment of taxes with respect to such claim is due). If
the Company notifies the Executive in writing prior to the expiration
of such period that it desires to contest such claim, the Executive
shall:
(i) give the Company any information reasonably
requested by the Company relating to such claim;
(ii) take such action in connection with contesting
such claim as the Company shall reasonably request in writing
from time to time, including, without limitation, accepting
legal representation with respect to such claim by an
attorney reasonably selected by the Company;
(iii) cooperate with the Company in good faith
in order effectively to contest such claim; and
(iv) permit the Company to participate in any
proceedings relating to such claim;
provided, however, that 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
the Executive harmless, on an after-tax basis, for any Excise Tax,
employment tax or income tax (including interest and penalties with
respect thereto) imposed as a result of such representation and payment
of costs and expenses. Without limitation on the foregoing provisions
of this Section 9(C), the Company shall control all proceedings taken
in connection with such contest and, at its sole option, may pursue or
forgo any and all administrative appeals, proceedings, hearings and
conferences with the taxing authority in respect of such claim and may,
at its sole option, either direct the Executive to pay the tax claimed
and sue for a refund or contest the claim in any permissible manner,
and the Executive agrees to prosecute such contest to a determination
before any administrative tribunal, in a court of initial jurisdiction
and in one or more appellate courts, as the Company shall determine;
provided, however, that if the Company directs the Executive to pay
such claim and sue for a refund, the Company shall advance the amount
of such payment to the Executive, on an interest-free basis and shall
indemnify and hold the Executive harmless, on an after-tax basis, from
any Excise Tax, employment 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; and
further provided that any extension of the statute of limitations
relating to payment of taxes for the taxable year of the Executive with
respect to which such contested amount is claimed to be due is limited
solely to such contested amount. Furthermore, the Company's control of
the contest shall be limited to issues with respect to which a Gross-Up
Payment would be payable hereunder and the Executive shall be entitled
to settle or contest, as the case may be, any other issue raised by the
Internal Revenue Service or any other taxing authority.
D. If, after the receipt by the Executive of an amount
advanced by the Company pursuant to Section 9(C), the Executive becomes
entitled to receive any refund with respect to such claim, the
Executive shall (subject to the Company's complying with the
requirements of Section 9(C)) promptly pay to the Company the amount of
such refund
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(together with any interest paid or credited thereon after taxes
applicable thereto). If, after the receipt by the Executive of an
amount advanced by the Company pursuant to Section 9(C), a
determination is made that the Executive shall not be entitled to any
refund with respect to such claim and the Company does not notify the
Executive in writing of its intent to contest such denial of refund
prior to the expiration of 30 days after such termination, then such
advance shall be forgiven and 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.
10. CONFIDENTIAL INFORMATION: The Executive shall hold in a
fiduciary capacity for the benefit of the Company all secret or
confidential information, knowledge or data relating to the Company or
any of its Affiliated Companies, and their respective businesses, which
shall have been obtained by the Executive during the Executive's
employment by the Company or any of its Affiliated Companies and which
shall not be or become public knowledge (other than by acts by the
Executive or representatives of the Executive in violation of this
Agreement). After termination of the Executive's employment with the
Company, the Executive shall not, without the prior written consent of
the Company or as may otherwise be required by law or legal process,
communicate or divulge any such information, knowledge or data to
anyone other than the Company and those designated by it. In no event
shall an asserted violation of the provisions of this Section 10
constitute a basis for deferring or withholding any amounts otherwise
payable to the Executive under this Agreement.
11. SUCCESSORS:
A. This Agreement is personal to the Executive and without
the prior written consent of the Company shall not be assignable 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. This Agreement shall inure to the benefit of and be
binding upon the Company and its successors and assigns.
C. The Company will 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 business and/or assets as aforesaid which assumes and
agrees to perform this Agreement by operation of law, or otherwise.
12. SOURCE OF PAYMENTS: All payments provided in this Agreement
shall, unless the plan or program pursuant to which they are made
provide otherwise, be paid in cash from the general funds of the
Company, and no special or separate funds shall be established and no
other segregation of assets shall be made to assure payment. Executive
shall have no right, title or interest whatever in or to any
investments which the Company may make to aid the Company in meeting
its obligations hereunder. Nothing contained in this Agreement, and no
action taken pursuant to this provision, shall create or be construed
to create a trust of any
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kind, or a fiduciary relationship, between the Company and
Executive or any other person. To the extent that any person acquires
a right to receive payments from the Company hereunder, such right
shall be no greater than the right of an unsecured creditor of the
Company.
13. EFFECT OF PRIOR AGREEMENTS: This Agreement contains the
entire understanding between the parties hereto and supersedes any
prior employment agreement between the Company or any predecessor of
the Company and Executive, except that this Agreement shall not affect
or operate to reduce any benefit or compensation inuring to Executive
of a kind elsewhere provided and not expressly provided or modified in
this Agreement. Specifically, but not by way of limitation, this
Agreement supersedes and replaces that certain Employment Agreement
between the parties, dated May 12, 1994.
14. CONSOLIDATION, MERGER OR SALE OF ASSETS: Nothing in this
Agreement shall preclude the Company from consolidating or merging into
or with, or transferring all or substantially all of its assets to,
another corporation which assumes this Agreement and all obligations
and undertakings of the Company hereunder; provided that no such action
shall diminish Executive's rights hereunder, including, without
limitation, rights under paragraph 5(C). Upon such a consolidation,
merger or transfer of assets in assumption, the term "Company" as used
herein shall mean such other corporation.
15. MISCELLANEOUS:
A. This Agreement shall be governed by and construed in
accordance with the laws of the State of Texas, without reference to
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 or modified otherwise than by a written
agreement executed by the parties hereto or their respective successors
and legal representatives.
B. 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 as follows:
IF TO THE EXECUTIVE: Don D. Jordan
5 Stayton Circle
Houston, Texas 77024
IF TO THE COMPANY: Houston Industries Incorporated
Five Post Oak Park
P.O. Box 4567
Houston, Texas 77210
ATTENTION: Mr. Hugh Rice Kelly
Vice President, General
Counsel and Secretary
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or to such other address as either party shall have furnished to the
other in writing in accordance herewith. Notice and communications
shall be effective when actually received by the addressee.
C. 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. 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. 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 5(C)(i)-(v) 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. The headings of paragraphs herein are included solely
for convenience and reference and shall not control the meaning or
interpretation of any of the provisions of this Agreement.
G. Contemporaneously with execution of this Agreement,
Executive shall be furnished a certified copy of a resolution of the
Board of Directors authorizing the execution and delivery of this
Agreement.
PART B
EXTENDED EMPLOYMENT TERM
The Board has determined that it is in the best interests of
the Company and its shareholders to assure that the Company will have
the continued benefit of the Executive's services for a transition
period following the Executive's attainment of age 65 in the event that
the Executive remains employed by the Company on the date he attains
age 65. Therefore, in order to accomplish this objective and in
consideration of Executive's agreement to remain employed beyond normal
retirement age, the Board has caused the Company to enter into this
Part B of this Agreement. This Part B shall be effective immediately
upon the execution of this Agreement and shall be null and void
immediately upon (a) a Change in Control (as defined in Part A above),
whereupon the provisions of Part A shall govern, or (b) the day that
the Executive attains age 65 if he is not employed by the Company on
such day.
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1. EMPLOYMENT PRIOR TO AGE 65: The parties hereby agree that
the Executive's employment with the Company is terminable at will by
either party until the date that the Executive attains age 65.
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2. CERTAIN DEFINITIONS: Capitalized terms in this Part B shall
have the meanings herein ascribed to them or, if not defined in this
Part B, the meanings ascribed to them in Part A of this Agreement
("Part A").
3. PROVISIONS INCORPORATED BY REFERENCE: Sections 7, 8 and 10
through 15 of Part A are hereby incorporated by reference into this
Part B.
4. EMPLOYMENT PERIOD: In the event that the Executive is
employed by the Company on the date that he attains age 65, the Company
hereby agrees to continue the Executive in its employ, and the
Executive hereby agrees to remain in the employ of the Company, in
accordance with the terms and provisions of this Part B, for the period
commencing on the date immediately following the date the Executive
attains age 65 and ending on the first day of the month coinciding with
or next following the Executive's attainment of age 67 (the "Extended
Employment Term").
5. TERMS OF EMPLOYMENT:
A. POSITION AND DUTIES: During the Extended Employment
Term and until the date of his termination of employment hereunder, the
Executive shall be employed as the Chairman of the Company or in such
other executive capacities, consistent with the Executive's years of
experience with the Company, as the Board may determine in its
discretion from time to time. Unless otherwise requested by the Board,
Executive shall resign and relinquish his office as Chief Executive
Officer of the Company effective as of his attainment of age 65.
B. COMPENSATION:
(i) ANNUAL BASE SALARY: During the Extended
Employment Term, the Executive shall receive an annual base
salary (the "Annual Base Salary") at a monthly rate set by
the Board in its discretion, which salary shall be in an
amount commensurate with the Executive's position, duties and
years of experience with the Company.
(ii) BENEFIT AND BONUS PLANS: During the Extended
Employment Term, (a) the Executive shall be entitled to
participate in all incentive, savings and retirement plans,
practices, policies and programs applicable generally to
other peer executives of the Company and its Affiliated
Companies and (b) the Executive and/or the Executive's
family, as the case may be, shall be eligible for
participation in and shall receive all benefits under welfare
benefit plans, practices, policies and programs provided by
the Company and its Affiliated Companies (including, without
limitation, medical, prescription, dental, disability,
executive salary continuance, employee life, group life,
accidental death and travel accident insurance plans and
programs) to the extent applicable generally to other peer
executives of the Company and its Affiliated Companies (the
benefits described in clauses (a) and (b) collectively
referred to herein as the "Other Benefits").
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(iii) SUPPLEMENTAL RETIREMENT
BENEFIT: Executive may be entitled to a Supplemental
Retirement Benefit under this Agreement; provided that
Executive shall not be entitled to such a benefit if
Executive's employment terminates for Cause or voluntarily
during the Extended Employment Term. For purposes of
determining the amount of any Supplemental Retirement Benefit
hereunder, Executive's benefit under the SERP (including both
the Retirement Plan Restoration Benefit and the Supplemental
Retirement Benefit) shall be calculated as provided in the
SERP except that for purposes of such calculation Executive's
"Average Monthly Compensation" (as defined in the Retirement
Plan and referenced in the SERP) shall be deemed to be the
result obtained by dividing the sum of (a) and (b) by 12,
where (a) is Executive's salary received from the Company for
the 12 months ended May 31, 1997 and where (b) is the EICP
bonus that would have been paid to the Executive with respect
to the year in which Executive reached age 64 had the
performance objectives thereunder been achieved at a target
level for such year. If the benefit so calculated is greater
than the benefit payable to the Executive under the terms of
the SERP, the Company shall pay to the Executive the amount
of the difference (a "Supplemental Retirement Benefit"). The
Supplemental Retirement Benefit shall be paid at the same
time and in the same manner as the Executive's benefit under
the SERP.
(iv) SUPPLEMENTAL BENEFIT UPON DEATH OR
DISABILITY: If the Executive's employment is terminated by
reason of the Executive's death or Disability during the
Extended Employment Term or if the Executive dies following
completion of the Extended Employment Term, any death or
disability benefit that is payable to the Executive or his
Beneficiary under the Company's Executive Benefits Plan and
that is calculated with reference to the Executive's salary
at termination of employment shall be calculated hereunder
based on the Executive's salary in effect immediately prior
to attainment of age 65. If a death or disability benefit is
greater when calculated under this Section B than the benefit
payable pursuant to the Executive Benefits Plan
(the "Underlying Benefit"), the Company shall pay to the
Executive or his Beneficiary the amount of the difference
(a "Supplemental Benefit"). Any Supplemental Benefit shall
be paid at the same time and in the same manner as the
Underlying Benefit.
(v) GROUP LIFE INSURANCE: Upon a termination of
employment (a) during the Extended Employment Term for any
reason other than voluntarily, by death or for Cause or
(b) at the end of the Extended Employment Term, the Executive
may elect to retain the group life insurance coverage
provided to Executive and other employees of the Company
under the Group Life Insurance Plan of the Company, and, if
the election is made, Executive shall pay, or reimburse the
Company for the cost of, the premiums for such insurance paid
by the Company at the same rate charged active employees of
the Company for similar coverage utilizing the same method or
procedure for calculating the premium as in effect and
applicable for Executive on the date hereof. Such right to
maintain group coverage shall be in an amount not to exceed
three times Annual Base Salary of Executive in effect prior
to Executive reaching age 65
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and shall continue for the life of Executive. It is hereby
understood and agreed that there shall be no increase in said
premium because of any reallocation due to age or risk that
may occur after the date of execution hereof.
6. OBLIGATIONS OF THE COMPANY UPON TERMINATION:
A. VOLUNTARILY, FOR CAUSE OR BY DEATH OR DISABILITY: If
the Executive's employment shall be terminated for Cause during the
Extended Employment Term or if the Executive voluntarily terminates
employment during the Extended Employment Term, including a termination
by reason of death or Disability, this Agreement shall terminate
without further obligations to the Executive other than the obligation
to pay to Executive the Annual Base Salary through the Date of
Termination plus the amount of any compensation previously deferred by
the Executive, in each case to the extent theretofore unpaid, and the
timely provision of Other Benefits; provided that in the case of a
death or Disability, the Company shall also pay or provide any benefit
for which Executive or his Beneficiary is eligible pursuant to Section
5(B)(iii)-(v) hereof. Any unpaid but due Annual Base Salary shall be
paid to the Executive in a lump sum in cash within 30 days of the Date
of Termination.
B. TERMINATION OTHER THAN VOLUNTARILY, FOR CAUSE OR BY
DEATH OR DISABILITY: If, during the Extended Employment Term, the
Company shall terminate the Executive's employment other than for Cause
or Disability, then:
(i) the Company shall pay to the Executive in a
lump sum in cash (or common stock of the Company with respect
to certain payments under LICP), within 30 days after the
Date of Termination, the aggregate of (1) the Executive's
Annual Base Salary and any annual bonus remaining owing to
the Executive for the Extended Employment Term as if there
had been no termination determined without any reduction for
the present value of such lump-sum payment and (2) any
accrued vacation pay, in each case to the extent not
theretofore paid (the sum of the amounts described in
clauses (1) and (2) above shall be hereinafter referred to as
the "Accrued Obligations");
(ii) for the remainder of the Extended Employment
Term, or such longer period as any plan, program, practice or
policy may provide, the Company shall continue benefits to
the Executive and/or the Executive's family at least equal to
those which would have been provided to them in accordance
with the plans, programs, practices and policies described in
Section 5(B)(ii)(b) of this Part B if the Executive's
employment had not been terminated; and
(iii) to the extent not theretofore paid or
provided, the Company shall timely pay or provide to the
Executive and/or the Executive's family any other amounts or
benefits required to be paid or provided or which the
Executive and/or the Executive's family is eligible to
receive pursuant to this
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Agreement and under any plan, program, policy or practice or
contract or agreement of the Company and its Affiliated Companies
as in effect and applicable generally to other peer executives and
their families.
7. DEFERRED COMPENSATION PLAN AND SERP PAYMENTS:
Notwithstanding any provision herein or any provision of the Deferred
Compensation Plan of the Company to the contrary, the Company and the
Board hereby agree to cause the Deferred Compensation Plan to be
administered so that any and all amounts of salary and/or bonus
theretofore deferred by Executive and held under the Deferred
Compensation Plan with instructions from Executive to pay in 15 annual
installments shall be paid in said 15 installments, shall remain in
said Plan earning interest at the rate prescribed therein until
installment distributions commence, shall commence as provided under
the terms of the Deferred Compensation Plan but shall not be commuted
and paid in a lump sum. Notwithstanding any provision of this
Agreement or any provision of the SERP to the contrary, the Company and
the Board hereby agree to cause the SERP to be administered so that no
benefit payable to or on behalf of Executive under the SERP may be
commuted and paid in a lump sum.
IN WITNESS WHEREOF, the Executive has hereunto set the
Executive's hand and, pursuant to the authorization from its Board of
Directors, the Company has caused these presents to be executed in its
name and on its behalf, all as of the day and year first above written.
HOUSTON INDUSTRIES INCORPORATED
By /s/ JOHN T. CATER
John T. Cater, Chairman of Personnel
Committee of the Board of Directors
EXECUTIVE
DON D. JORDAN
Don D. Jordan
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