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AMENDED AND RESTATED EMPLOYMENT AGREEMENT
This
Amended and Restated Employment Agreement, dated as of
February 25, 2008, amends and restates the employment
agreement originally entered into as of August 21, 1995, as
amended and restated as of May 10, 1999 and amended by
Amendment No. 1 on March 14, 2000, and is by and between
MidAmerican Energy Holdings Company (formerly California
Energy Company, Inc. (“CalEnergy”), an Iowa
corporation (the “Company”), and David L. Sokol
(the “Executive”).
RECITALS
The
Company desires to employ the Executive as its Chairman and
Chief Executive Officer on the terms set forth in this
Agreement, and the Executive desires to accept such
employment.
Accordingly,
the Company and the Executive agree as follows:
AGREEMENT
Section
1.
Defined
Terms . Terms used but not defined in this
Agreement will have the meanings ascribed to them in Exhibit A
to this Agreement.
Section
2.
Employment
.
(a) The
Company will employ the Executive as, and the Executive will
act as, the Chairman and Chief Executive Officer of the
Company upon the terms set forth in this Agreement, for the
Term of Employment, except that in the event the Executive
relinquishes his position as Chief Executive Officer but
offers to remain employed as Chairman of the Board of the
Company pursuant to Section 7(c), the Executive will act
solely as Chairman of the Board upon the terms set forth in
this Agreement for the Term of Employment.
(b) The
Executive’s primary place of employment will be Omaha,
Nebraska.
(c) For
so long as the Executive continues to serve as either Chairman
or Chief Executive Officer of the Company, he shall have the
right (i) to serve as a member of the Board, and (ii) to
designate two other individuals as nominees for election to
the Board.
Section
3.
Duties
.
(a) The
Executive (i) will manage the business of the Company and
supervise and direct the other officers of the Company and its
employees, agents and representatives, and (ii) will perform
and discharge such other duties, and will have such other
authority, as are customary to his office. In performing such
duties, the Executive will report directly to the Board of
Directors.
(b) The
Board will not reduce the title, office, duties or authority
of the Executive in any material respect and will not require
the Executive to relocate his residence from Omaha, Nebraska.
During the Term of Employment, the Company will use its best
efforts to cause the Executive to be nominated and elected to
the Company’s Board of Directors.
(c) The
Executive will act, without any compensation in addition to
the compensation payable pursuant to this Agreement, as an
officer of any subsidiary of the Company, or as a member of
the board of directors of any subsidiary of the Company, if so
appointed or elected.
(d) During
the Term of Employment, the Executive (i) will devote his
entire time, attention and energies during normal business
hours to the business of the Company, and (ii) will not,
without the Consent of the Board, perform any services for any
other Person or engage in any other business or professional
activity; provided, however, that in the event the Executive
relinquishes his position as Chief Executive Officer but
offers to remain employed as Chairman of the Board of the
Company pursuant to Section 7(c), the foregoing items (i) and
(ii) shall no longer apply and instead the Executive shall
provide services to the Company as reasonably requested by the
Chief Executive Officer or the Board and agrees to be
available to provide such services for up to forty (40) hours
during each month while this Agreement is in
effect.
(e) Notwithstanding
subsection (d), the Executive, without the Consent of the
Board, may (i) perform the consulting duties contemplated in
the letter agreement dated October 5, 1990, as it may be
amended, by and among the Executive, Ogden Corporation and
Ogden Projects, Inc., (ii) purchase securities issued by, or
otherwise passively invest his personal or family assets in,
any other company or business, and (iii) engage in
governmental, political, educational or charitable activities,
but only to the extent that those activities (A) are not
inconsistent with any direction of the Board or any duties
under this Agreement, and (B) do not interfere with the
devotion by the Executive of his time, attention and energies
during normal business hours to the business of the
Company.
Section
4.
Compensation
.
(a) During
the Term of Employment, the Company will pay the Executive a
base salary at a minimum annual rate of seven hundred and
fifty thousand dollars ($750,000), in substantially equal
periodic payments in accordance with the Company’s
practices for executive employees. Notwithstanding the
foregoing, if the Executive relinquishes his position as Chief
Executive Officer but offers to remain employed as Chairman of
the Board of the Company pursuant to Section 7(c), the Company
shall pay the Executive an annual salary in the amount of
seven hundred and fifty thousand dollars ($750,000) for each
12-month period during the Term of Employment, payable in
equal monthly installments on the first business day of the
Company of each month during the Term of
Employment.
(b) The
Board will review the salary payable to the Executive at least
annually beginning in the fourth fiscal quarter of 2008. The
Board, in its discretion, may increase the salary of the
Executive from time to time, but may not reduce the salary of
the Executive below the amount set forth in subsection (a)
above. The Board may issue the Executive stock options from
time to time at its discretion.
(c) During
the Term of Employment, the Company will pay the Executive an
annual bonus, not later than ten calendar days after the end
of the preceding fiscal year of the Company in an amount
determined by the Board, by reference to the accomplishment by
the Executive of goals established by the Board for the
related fiscal year. The annual bonus paid to the Executive,
however, will not be less than the Minimum Bonus. The
Executive shall also be eligible to be paid other bonuses for
each fiscal year as determined by the Board. The
Executive’s annual bonus, together with all such other
bonuses paid or payable for the fiscal year (including any
amounts for which receipt is otherwise deferred pursuant to a
plan or arrangement with the Company), is referred to herein
as “Annual Bonus Compensation.” However,
“Annual Bonus Compensation” shall not include the
Earnings Per Share bonuses set forth in the letter of March
24, 2003 to Executive.
(d) If
the Executive suffers a Disability which continues for more
than 60 calendar days, the Company may elect to pay the
Executive, for so long as the Disability continues, fifty (50)
percent of the salary otherwise payable to the Executive under
Section 4(a), and fifty (50) percent of the Minimum Bonus
otherwise payable to the Executive pursuant to Section 4(c).
Any such election shall be subject to and will not affect the
rights of the Company or the Executive under Sections 7(a) (v)
and 8(b) hereof.
(e) The
Company will reimburse the Executive, subject to compliance by
the Executive with the Company’s customary reimbursement
practices, for all reasonable and necessary out-of-pocket
expenses incurred by the Executive on behalf of the company in
the course of its business.
(f) The
Company may reduce any payments made to the Executive under
this Agreement by any required federal, state or local
government withholdings or deductions for taxes or similar
charges, or otherwise pursuant to law, regulation or
order.
(g) Any
base salary payable to the Executive for any period of
employment of less than a year during the Term of Employment
will be reduced to reflect the actual number of days of
employment during the period except as provided in Section 8
(b).
Section
5.
Other
Benefits .
(a) During
the Term of Employment (including the Term of Employment after
Executive has relinquished his position as Chief Executive
Officer), the Executive and his family may participate in and
receive benefits under any employee benefit plan which the
Company makes generally available to its employees and their
families, including any pension, life insurance, medical
benefits, dental benefits or disability plan, but only to the
extent that the Executive or his family otherwise satisfies
the standards established for participation in the
plan.
(b) The
Executive may take up to six weeks of vacation during each
full calendar year during the Term of employment, without loss
of compensation or other benefits under this
Agreement.
Section
5A.
Supplemental
Retirement Benefits .
(a) Effective
as of March 12, 1999, the closing date of the merger between
the Company and MidAmerican Energy Company, resulting in the
creation of MidAmerican Energy Holdings Company (the
“Merger Date”), the Executive became a participant
in the MidAmerican Energy Company Supplemental Retirement Plan
for Designated Officers (the “SERP”).
(b) The
Executive shall receive fully vested years of participation
credit under the SERP (for all purposes, including vesting and
benefit accrual) for all years of service (or portions
thereof) performed at the Company prior to the Merger Date, as
provided on Exhibit B attached hereto.
(c) The
Executive shall be entitled to an Early Retirement Benefit
Payment Option under the SERP pursuant to which he shall
commence receiving benefits under the SERP after the
Executive’s separation from service or disability on or
after attaining age 47, which payments shall be calculated
pursuant to the SERP but which shall be no less than as
provided on Exhibit C hereto (including for purposes of the
following sentence). In the event of the Executive’s
death, benefits shall be paid pursuant to Section 6.4 of the
SERP; provided, however, that any payment due under Section
6.4(a) of the SERP shall continue for the remaining lifetime
of the Executive’s surviving “Spouse” (as
defined in the SERP) or for 360 months if the Executive dies
without a surviving Spouse; and further provided, however,
that any payment due under Section 6.4(b) of the SERP shall be
payable without regard to the two-thirds and fifty percent
limitations contained therein.
(d) In
addition, the Executive shall be entitled to the following
under the SERP:
(i)
for purposes of determining years of participation credit, the
Executive shall be credited with additional years of
participation (or portions thereof) equal to the difference
between age 65 and the Executive’s age (in years or
portions thereof) on January 27, 2000, the date of a change in
control of the Company, and
(ii)
any benefits under the SERP not fully vested on January 27
became fully vested as of such date.
(e) Since
a "rabbi trust" has previously been established in order to
provide security for the payment of benefits to Executive
pursuant to the SERP, the Company shall have a continuing
obligation to deposit into the rabbi trust an amount which,
with the expected earnings thereon from reasonably prudent and
conservative investments (as confirmed by a certificate of a
national accounting firm of recognized standing which is
independent of the Company) shall be sufficient to satisfy the
ultimate benefit obligations to Executive pursuant to the
SERP.
(f) A
general release of claims under the SERP shall not be required
of the Executive in order to receive benefits
thereunder.
(g) The
Executive’s entitlement to benefits under the SERP shall
be nonforfeitable and, Section 6.5 of the SERP
notwithstanding, shall not be adversely affected in any way
upon termination of the Executive’s employment for
Cause.
Section
6.
Confidentiality
and Post-Employment Restrictions .
(a) The
Executive acknowledges that the Company has confidential
information and trade secrets, whether written or unwritten,
with respect to carrying on its business, including sensitive
technology and engineering information and data, names, of
past, present and prospective customers and vendors of the
Company, methods of pricing contracts and income and expenses
associated therewith, negotiated prices and offers
outstanding, credit terms and status of accounts and the terms
or circumstances of any business arrangements between the
Company and any third parties (“Confidential Information
and Trade Secrets”). As used in this Agreement, the term
Confidential Information and Trade Secrets does not include
(i) information which becomes generally available to the
public other than as a result of a disclosure by the
Executive, (ii) information which becomes available to the
Executive on a nonconfidential basis from a source other than
the Company, or (iii) information known to the Executive prior
to any disclosure to him by the Company. The Executive further
acknowledges that the Executive possesses a high degree of
knowledge of the geothermal energy industry and, in
particular, has committed to a long-standing relationship with
the Company as employee, director and officer, which has
allowed, and will continue to allow, him access to the
Company’s Confidential Information and Trade Secrets.
Accordingly, any employment by the Executive with another
employer in the geothermal energy industry or participation by
him as a substantial investor in any such industry may
necessarily involve disclosure of the Company’s
Confidential Information and Trade Secrets. Consequently, the
Executive agrees that, if he voluntarily resigns his
employment with the Company for any reason other than a breach
of this Agreement by the Company, he shall not at any time
during the two-year period after such resignation, directly or
indirectly accept employment by or invest in (except as a
passive investor in a public corporation or in a publicly
issued partnership interest which, in either event, would not
exceed an ownership interest of 3% of the outstanding equity
or partnership interest) in any person, firm, corporation,
partnership, joint venture or business which is primarily
engaged in the production or marketing of electrical energy
from geothermal resources. The preceding sentence
notwithstanding, Executive shall not be precluded from
accepting employment or providing services to Peter Kiewit
Sons’, Inc. or any Affiliate thereof.
(b) Without
the Consent of the Board, the Executive will not, for two
years after the Term of Employment, (i) disclose any
Confidential Information and Trade Secrets of the Company or
any Affiliate of the Company to any Person (other than the
Company, directors, officers or employees of the Company or
representatives thereof), or (ii) otherwise make use of any
Confidential Information and Trade Secrets other than in
connection with authorized dealings with or by the
Company.
(c) For
a period of two years after the Term of Employment, the
Executive shall neither directly nor indirectly solicit, on
behalf of another employer, the employment of any person who
is then currently employed by the Company, or otherwise
induce, on behalf of another employer, such person to leave
the employment of the Company without the Company’s
prior written approval.
(d) The
Executive will hold on behalf of the Company and as the
property of the Company, all memoranda, manuals, books,
papers, letters, documents, computer software and other
similar property obtained during the course of his employment
by the Company and relating to the Company’s business,
and will return such property to the Company at any time upon
demand by the Board and, in any event, within five calendar
days after the end of the Term of Employment.
Section
7.
Termination of
Employment or Change in Employment Status
.
(a) The
employment of the Executive under this Agreement will
terminate on the earliest of: (i) written notice by the
Executive of his resignation; (ii) the 30th calendar day after
the Company gives to the Executive written notice of
termination without Cause; (iii) the fifth calendar day after
the Company gives to the Executive written notice of the
existence of Cause; (iv) the 30th calendar day after the
Executive gives to the Company written notice of (A) the
failure by the Company to pay to the Executive, for a material
period of time and in a material amount, compensation due and
payable by the Company under Section 4(a) or 4(c), or (B) any
breach by the Company or the Board of Section 3(b) or Section
4(b); (v) the Permanent Disability of the Executive; or (vi)
the death of the Executive.
(b) If
the Employment of the Executive is terminated under this
Agreement, the obligations of the Executive under Section 6
will remain in full force and effect, and the termination will
not abrogate any rights or remedies of the Company or the
Executive with respect to any breach of the Agreement, except
as expressly provided in Sections 8 and 9.
(c) If
the Executive relinquishes his position as Chief Executive
Officer but offers to
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