EXHIBIT 10.27
Employment Agreement
This Employment Agreement ("Agreement"), including the attached
Exhibit "A," is entered into between NORTHERN PLAINS NATURAL GAS
COMPANY ("NPNG") a wholly owned subsidiary of ENRON CORP. ("Enron")
and WILLIAM R. CORDES ("Employee"), to be effective as of June 1,
2001 (the "Effective Date"). NPNG and Employee agree as follows:
Article 1: Employment, Compensation and Benefits
1.1 Term and Position. NPNG agrees to employ Employee, and
Employee agrees to be employed by NPNG for the Term (the "Term")
described on Exhibit "A." NPNG and Enron may assign Employee to a
different position or modify Employee's duties and responsibilities;
provided however, neither NPNG nor Enron may relocate Employee
outside of Omaha, Nebraska without his consent.
1.2 Compensation. Employee shall be paid as set forth on
Exhibit "A." Employee's monthly base salary shall be paid in
semimonthly installments in accordance with NPNG's standard payroll
practice, and (as with all other payments made to Employee by NPNG)
is subject to withholding of all federal, state, city, or other taxes
as may be required by law.
1.3 Benefits. Employee shall be allowed to participate, on the
same basis generally as other employees employed in the same or
similar positions, in all general employee benefit plans and programs
that NPNG has made available to NPNG's employees on or after the
Effective Date. Nothing in this Agreement is to be construed to
provide greater rights, participation, coverage, or benefits than
provided to similarly-situated employees pursuant to the terms of
such benefit plans and programs. NPNG is not obligated to institute,
maintain, or refrain from changing, amending, or discontinuing any
such benefit program or plan, so long as such actions are similarly
applicable to covered employees generally. Employee is not eligible
for severance under the NPNG Corp. Severance Pay Plan or any
replacement severance plan during the Term of this Agreement.
Additionally, compensation and benefits payable under this Agreement
shall be offset by any amounts that Employee owes the Company,
including the value of NPNG property, upon the termination of
Employee's employment under this Agreement.
Article 2: Termination Before the Term Expires and Effects of Such
Termination
2.1. Termination By NPNG. NPNG may terminate Employee's
employment before the Term expires for the following reasons:
a. Cause. For "cause" upon the determination by NPNG
that "cause" exists to terminate the Employee. "Cause" means
(i) Employee's gross negligence, willful misconduct, or neglect
in the performance of the duties and services as an NPNG
employee; (ii) Employee's final conviction of a felony by a
trial court; (iii) Employee's breach of any provision of this
Agreement; (iv) Employee's violation of any policy of NPNG; or
(v) Employee's violation of any federal, state, or local law or
regulation in the performance of his or her duties for NPNG. If
NPNG terminates Employee's employment for Cause, Employee shall
be entitled only to his or her pro rata salary through the date
of such termination, and all future compensation and benefits,
other than benefits to which Employee is entitled under the
terms of NPNG compensation and/or benefit plans, shall cease.
b. Involuntary Termination. Involuntary termination at
NPNG's option may occur for any reason whatsoever, including
termination without cause, in the sole discretion of NPNG. Upon
an Involuntary Termination before the Term expires, Employee is
entitled to receive the amount of one year's annual base salary
and performance bonus ("Amount"). This Amount will be
calculated by taking the average of Employee's annual base
salary and performance bonus for the last two years of
Employee's employment with NPNG. Fifty percent of the Amount
shall be paid in six (6) equal installments each month during
the first six (6) months following the Involuntary Termination;
the remaining fifty percent will be paid in a single lump-sum
payment at the end of that six-month period.
c. Death/Disability. Upon Employee's (i) death, or (ii)
becoming incapacitated or disabled so as to entitle Employee to
benefits under NPNG's long-term disability plan, or (iii)
becoming permanently and totally unable to perform Employee's
duties for NPNG as a result of any physical or mental impairment
supported by a written opinion by a physician selected by NPNG.
Upon termination of employment under this paragraph, Employee or
Employee's heirs shall be entitled only to Employee's pro rata
salary through the date of such termination, and all future
compensation and benefits, other than benefits to which Employee
is entitled under the terms of NPNG compensation and/or benefit
plans, shall cease.
2.2 Termination By Employee. Employee may terminate the
employment relationship before the Term expires for the following
reasons:
a. Breach by NPNG. A material breach by NPNG of any
material provision of this Agreement that remains uncorrected
for 30 days following Employee's written notice to NPNG of such
breach. Upon such a termination, Employee shall be entitled to
receive the amount of one year's annual base salary and
performance bonus ("Amount"). This Amount will be calculated by
taking the average of Employee's annual base salary and
performance bonus for the last two years of Employee's
employment with NPNG. Fifty percent of the Amount shall be paid
in six (6) equal installments each month during the first six
(6) months following the Involuntary Termination; the remaining
fifty percent will be paid in a single lump-sum payment at the
end of that six-month period.
b. Voluntary Termination. For any other reason
whatsoever, in Employee's sole discretion. Upon a Voluntary
Termination before the Term expires, all of Employee's future
compensation and benefits, other than benefits to which Employee
is entitled under the terms of NPNG compensation and/or benefit
plans, shall cease as of the date of termination, and Employee
shall be entitled only to pro rata salary through the
termination date.
2.3 Offset. In all cases, the compensation and benefits
payable to Employee under this Agreement upon termination of
employment shall be offset by any amounts to which Employee otherwise
may be entitled under any benefit plans, severance plans, voluntary
payments, and policies of NPNG or its affiliates, or amounts
(including the value of NPNG's property) that Employee owes to NPNG.
2.4 Continuing Obligations. Neither termination of employment
nor expiration of the Term terminates the continuing obligations of
this Agreement, including obligations under Articles 3 and 4.1.
2.5 Employment Beyond Term. Should Employee remain employed by
NPNG after the Term expires, such employment shall convert to an
employment-at-will relationship, terminable at any time by either
NPNG or Employee for any reason whatsoever, with or without cause.
Article 3: Confidential Information; Post-Employment Obligations
3.1 This Agreement. The terms of this Agreement constitute
confidential information, which Employee shall not disclose to anyone
other than Employee's spouse, attorneys, tax advisors, or as required
by law. Disclosure of these terms is a material breach of this
Agreement and could subject Employee to disciplinary action,
including without limitation, termination of employment for cause.
3.2 NPNG Property. All written materials, records, data, and
other documents prepared or possessed by Employee during Employee's
employment by NPNG are NPNG property. All information, ideas,
concepts, improvements, discoveries, and inventions that are
conceived, made, developed, or acquired by Employee individually or
in conjunction with others during Employee's employment (whether
during business hours and whether on NPNG's premises or otherwise),
which relate to NPNG's business, products, or services are NPNG's
sole and exclusive property. All memoranda, notes, records, files,
correspondence, drawings, manuals, models, specifications, computer
programs, maps, and all other documents, data, or materials of any
type embodying such information, ideas, concepts, improvements,
discoveries, and inventions are NPNG's property. At the termination
of Employee's employment with NPNG for any reason, Employee shall
return all of NPNG's documents, data, or other NPNG property to NPNG.
3.3 Confidential Information; Non-Disclosure. Employee
acknowledges that the business of NPNG and its affiliates is highly
competitive and that NPNG has agreed to provide and immediately will
provide Employee with access to Confidential Information relating to
the business of NPNG and its affiliates. "Confidential Information"
means and includes NPNG's confidential and/or proprietary information
and/or trade secrets that have been developed or used and/or will be
developed and that cannot be obtained readily by third parties from
outside sources. Confidential Information includes, by way of
example and without limitation, the following: information regarding
customers, employees, contractors, and the industry not generally
known to the public; strategies, methods, books, records, and
documents; technical information concerning products, equipment,
services, and processes; procurement procedures and pricing
techniques; the names of and other information concerning customers,
investors, and business affiliates (such as contact name, service
provided, pricing for that customer, type and amount of services
used, credit and financial data, and/or other information relating to
NPNG's relationship with that customer); pricing strategies and price
curves; positions; plans and strategies for expansion or
acquisitions; budgets; customer lists; research; weather data;
financial and sales data; trading methodologies and terms;
evaluations, opinions, and interpretations of information and data;
marketing and merchandising techniques; prospective customers' names
and marks; grids and maps; electronic databases; models;
specifications; computer programs; internal business records;
contracts benefiting or obligating NPNG; bids or proposals submitted
to any third party; technologies and methods; training methods and
training processes; organizational structure; personnel information,
including salaries of personnel; payment amounts or rates paid to
consultants or other service providers; and other such confidential
or proprietary information. Employee acknowledges that this
Confidential Information constitutes a valuable, special, and unique
asset used by NPNG its affiliates in their businesses to obtain a
competitive advantage over their competitors. Employee further
acknowledges that protection of such Confidential Information against
unauthorized disclosure and use is of critical importance to NPNG and
its affiliates in maintaining their competitive position. Employee
also will have access to, or knowledge of, Confidential Information
of third parties, such as actual and potential customers, suppliers,
partners, joint venturers, investors, financing sources and the like,
of NPNG and its affiliates. NPNG also agrees to provide Employee
with immediate access to Confidential Information and specialized
training regarding NPNG's methodologies and business strategies,
which will enable Employee to perform his or her job at NPNG.
Employee agrees that Employee will not, at any time during or
after Employee's employment with NPNG, make any unauthorized
disclosure of any Confidential Information or specialized training of
NPNG or its affiliates, or make any use thereof, except in the
carrying out of his or her employment responsibilities hereunder.
Employee also agrees to preserve and protect the confidentiality of
third party Confidential Information to the same extent, and on the
same basis, as NPNG's Confidential Information.
3.4 Non-Competition Obligations. NPNG agrees to and shall
provide Employee with immediate access to Confidential Information.
Ancillary to the rights provided to Employee following Involuntary
Termination, NPNG's provision of Confidential Information and
specialized training to Employee, and Employee's agreement not to
disclose Confidential Information, and in order to protect the
Confidential Information described above, NPNG and Employee agree to
the following non-competition provisions. Employee agrees that
during the Period of Post-Employment Non-Competition Obligations
defined in Exhibit "A," Employee will not, directly or indirectly,
for Employee or for others, in the Geographic Region of
Responsibility described on Exhibit "A" (or, if Employee's Geographic
Region has changed, in any and all geographic regions in which
Employee has worked during the 12-month period immediately preceding
Employee's termination of Employment):
a. engage in the business of buying, selling, trading,
structuring, or executing transactions in commodities, assets,
or products in which NPNG is doing business, has plans to engage
in business, or has engaged in business in the preceding 12-
month period, including, but not limited to, gas, electricity,
coal, chilled water, clean fuel, liquids, emissions,
petrochemicals, energy assets, transmission capacity,
agriculture, forest products, lumber, paper, pulp, packaging,
coffee, sugar, cocoa, communications, steel alloys, metals,
weather products, insurance products, electronic commerce
(including business-to-business electronic commerce), "click
trading," bandwidth communications, interest rates, credit,
currencies, securities, or other commodities (including, without
limitation, other energy commodities), or any futures,
derivatives, or equities related to any of the foregoing,
whether at wholesale or retail, or the development of systems,
information technology, accounting, or risk management with
respect to any of the foregoing;
b. engage in other types of business performed by NPNG,
including the acquiring or disposing of assets or equity
investments or providing or raising capital, through loans,
equity, joint ventures, partnerships, working interests,
production payments, credit, or similar arrangements into
products, commodities, futures, derivatives, or other items in
which NPNG currently is engaging in business, has plans to
engage in business, or has engaged in business in the preceding
12-month period;
c. engage in activities relating to NPNG's business not
described in parts a and b of this Article 3.4, to the extent
that Employee has knowledge or information about such
activities; or
d. render advice or services to, or otherwise assist, any
other person, association or entity in the business of a, b, or
c above.
Employee understands that the foregoing restrictions may limit his or
her ability to engage in certain businesses in the geographic region
and during the period provided for above, but acknowledges that these
restrictions are necessary to protect the Confidential Information
NPNG has provided to Employee.
3.5 Non-Solicitation of Customers. For the Period of Non-
Solicitation of Customers described on Exhibit "A," Employee will not
call on, service, or solicit competing business from customers of
NPNG or its affiliates whom Employee, within the previous twenty-four
(24) months, (i) had or made contact with, or (ii) had access to
information and files about.
3.6 Non-Solicitation of Employees. During Employee's
employment, and for a period of twelve (12) months following the
termination of employment for any reason, Employee will not, either
directly or indirectly, call on, solicit, or induce any other
employee or officer of NPNG or its affiliates whom Employee had
contact with, knowledge of, or association with in the course of
employment with NPNG to terminate his or her employment, and will not
assist any other person or entity in such a solicitation.
3.7 Early Resolution Conference/Arbitration. The parties are
entering into this Agreement with the express understanding that this
Agreement is clear and fully enforceable as written. If Employee
ever decides to contend that any restriction on activities imposed by
this Agreement no longer is enforceable as written or does not apply
to an activity Employee intends to engage in on behalf of a competing
business, Employee first will notify a member of NPNG's Executive
Committee in writing and meet with a company representative at least
fourteen (14) days before engaging in any activity that foreseeably
could fall within the questioned restriction to discuss resolution of
such claims (an "Early Resolution Conference"). Should the parties
not be able to resolve disputes at the Early Resolution Conference,
the parties agree to use confidential, binding arbitration to resolve
the disputes. The arbitration shall be conducted in accordance with
the Commercial Arbitration Rules of the American Arbitration
Association before an arbitrator licensed to practice law in Texas.
Either party may seek a temporary restraining order, injunction,
specific performance, or other equitable relief regarding the
provisions of this Section if the other party fails to comply with
obligations stated herein. The parties' agreement to arbitrate
applies only to the matters subject to an Early Resolution
Conference.
3.8 Warranty and Indemnification. Employee warrants that
Employee is not a party to any restrictive agreement limiting
Employee's activities in his/her employment by NPNG. Employee
further warrants that at the time of the signing of this Agreement,
Employee knows of no written or oral contract or of any other
impediment that would inhibit or prohibit employment with NPNG, and
that Employee will not knowingly use any trade secret, confidential
information, or other intellectual property right of any other party
in the performance of Employee's duties hereunder. Employee shall
hold NPNG harmless from any and all suits and claims arising out of
any breach of such restrictive agreement or contracts.
Article 4: Miscellaneous
4.1 Statements About NPNG. Employee shall refrain, both during
and after his or her employment, from publishing any oral or written
statements about NPNG or any of its subsidiaries or affiliates, or
any of such entities' officers, employees, agents, or representatives
that are disparaging, slanderous, libelous, or defamatory; or that
disclose private or confidential information about their business
affairs; or that constitute an intrusion into their seclusion or
private lives; or that give rise to unreasonable publicity about
their private lives; or that place them in a false light before the
public; or that constitute a misappropriation of their name or
likeness.
4.2 Notices. Notices and all other communications shall be in
writing and shall be deemed to have been duly given when personally
delivered or when mailed by United States registered or certified
mail. Notices to NPNG shall be sent to Northern Plains Natural Gas
Company, 1111 South 103rd Street, Omaha, NE 68124-1000 Attention:
Corporate Secretary. Notices and communications to Employee shall be
sent to the address Employee most recently provided to NPNG.
4.3 No Waiver. Other than as described in Section 2.2 a, no
failure by either party at any time to give notice of any breach by
the other party of, or to require compliance with, any condition or
provision of this Agreement shall be deemed a waiver of any
provisions or conditions of this Agreement.
4.4 Mediation. If a dispute arises out of or related to
Employee's employment, other than a dispute regarding Employee's
obligations under Articles 3 and 4.1, and if the dispute cannot be
settled through direct discussions, then NPNG and Employee agree to
try to settle the dispute in an amicable manner by confidential
mediation before having recourse to any other proceeding or forum.
4.5 Venue/Jurisdictions. This Agreement shall be governed by
Texas law. Any litigation that may be brought by either party
involving the enforcement of this Agreement or the rights, duties, or
obligations of this Agreement, shall be brought exclusively in the
State or federal courts sitting in Houston, Harris County, Texas.
4.6 Assignment. This Agreement shall be binding upon and inure
to the benefit of NPNG and any other person, association, or entity
that may acquire or succeed to all or substantially all of the
business or assets of NPNG. NPNG may assign this Agreement to any
affiliate or any other entity. Employee's rights and obligations
under this Agreement are personal, and they shall not be assigned or
transferred without NPNG's prior written consent.
4.7 Other Agreements. Other agreements exist between NPNG and
Employee relating to the employment relationship (e.g., obligations
contained in NPNG's Code of Ethics booklet, Enron Corp.'s Code of
Ethics booklet and benefit plans). In addition, Employee signed
Agreement Type "B" on December 22, 1983, and that Agreement is
incorporated by reference. This Agreement replaces and merges other,
previous agreements and discussions pertaining to the nature of,
term, and termination of Employee's employment relationship with
NPNG, and this Agreement constitutes the entire agreement of the
parties with respect to such subject matters. No representation,
inducement, promise, or agreement has been made by either party with
respect to such subject matters, and no agreement, statement, or
promise relating to the employment of Employee by NPNG that is not
contained in this Agreement shall be valid or binding. Any
modification of this Agreement will be effective only if it is in
writing and signed by each party.
4.8 Invalidity. Should any provision(s) in this Agreement be
held by a court of competent jurisdiction to be invalid, void, or
unenforceable, the remaining provisions shall be unaffected and shall
continue in full force and effect, and the invalid, void or
unenforceable provision(s) shall be deemed not to be part of this
Agreement.
IN WITNESS WHEREOF, NPNG and Employee have executed this
Agreement in multiple originals to be effective on the first date of
the Term.
NORTHERN PLAINS NATURAL GAS WILLIAM R. CORDES
COMPANY
By: /s/Stanley C. Horton /s/ William R. Cordes
Name: Stanely C. Horton This 24th day of July, 2001
Title: Chairman of the Board
This 30th day of July, 2001
Exhibit "A" to
Employment Agreement
Between NORTHERN PLAINS NATURAL GAS COMPANY and WILLIAM R. CORDES
Employee Name: William R. Cordes
Term: June 1, 2001 through May 31, 2003
Position: President, Northern Plains Natural Gas Company
Location: Omaha, Nebraska
Monthly Base Salary: Employee's monthly base salary shall be
Twenty Six Thousand Dollars ($26,000.00).
Performance Bonus: Employee may be eligible to participate in the
Enron Corp. Annual Incentive Plan ("Plan") or any
appropriate replacement bonus plan of NPNG. All
Performance Bonuses are discretionary and shall
be paid in accordance with the terms and
provisions of the Plan and other criteria
established by company, a portion of which may be
paid in cash and a portion of which may be paid
in stock options and/or restricted stock.
Signing Bonus: As a signing bonus, subject to and effective upon
approval by the Compensation Committee of the
Board of Directors of NPNG, NPNG shall grant
Employee Three Hundred Thousand Dollars
($300,000.00) in Northern Border Phantom Units in
the form of three separate grants to be issues as
follows: $100,000.00 upon the execution of this
Agreement, $100,000.00 on the first anniversary
of this Agreement, and $100,000.00 upon the
second anniversary of this Agreement provided
Employee is employed by NPNG.
Geographic Region
of Responsibility: United States of America
Period of Post-Employment Employee's obligations in paragraph
Non-Competition Obligations 3.4, Non-Competition Obligations, and
and Non-Solicitation of paragraph 3.5, Non-Solicitation of Customers,
Customers: shall survive the termination of employment
and extend through the latest of the following
dates, whichever is applicable: (a) Twelve
(12) months after Employee's voluntary
termination of employment if such termination
occurs during the Term; or (b) Six (6) months
after the last date of Employee's employment
with NPNG Corp. in the event of an involuntary
termination during the Term; or (c) Three (3)
months after Employee's termination of
employment for any reason if such termination
occurs after the Term.