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Exhibit 10(g)
EMPLOYMENT AGREEMENT
THIS
EMPLOYMENT AGREEMENT (“Agreement”)
is made by and between TXU
CORP. (“Company”),
and Jonathan Siegler (“Executive”), and is dated
as of August 2, 2004 (“Effective Date”). The
Agreement is designed to strengthen the link between
Executive’s compensation and long-term shareholder
value.
WITNESSETH :
WHEREAS
, Company desires to employ Executive;
WHEREAS ,
Executive desires to accept employment by Company pursuant to all
of the terms and conditions hereinafter set forth;
NOW, THEREFORE ,
for and in consideration of the mutual promises, covenants and
obligations contained herein, Company and Executive agree as
follows:
ARTICLE
1:
EMPLOYMENT AND DUTIES
1.1
Employment; Effective Date
. Company agrees to employ Executive and Executive agrees
to be employed by Company, beginning on the Effective Date and
continuing for the period of time set forth in Article 2 of this
Agreement, subject to the terms and conditions of this Agreement.
Executive understands and agrees that this Agreement is subject to
final ratification and approval by the Organization and
Compensation Committee of the Board of Directors of Company and by
the Board of Directors of Company.
1.2
Positions
. From and after the Effective Date, Company shall employ
Executive in the position of Vice President of
Strategy.
1.3
Duties and Services .
Executive
agrees to serve in the position referred to in Paragraph 1.2.
Executive agrees to perform diligently and to the best of his
abilities the duties and services appropriate to such offices which
the parties mutually may agree upon from time to time.
ARTICLE
2:
TERM AND TERMINATION OF EMPLOYMENT
2.1
Term
. Unless sooner terminated pursuant to other provisions
hereof, Company agrees to employ Executive for a three (3) year
period beginning on the Effective Date (“Term”),
provided that the Term shall be automatically renewed for
successive one (1) year periods following the expiration of the
three (3) year period described above, unless either party provides
the other party with notice (at least six (6) months before the
expiration of the applicable Term) of its (or his)
intention
not to renew the Term, in which case the Term shall expire at the
end of the current Term. Notwithstanding anything to the contrary
herein, (i) in the event of a Change in Control (as defined below)
when there is less than one (1) year left to the Term, or (ii) if,
at the time this Agreement would otherwise expire, Company is in
the process of negotiating, with
the approval of the Board of Directors or a committee thereof, with
a third party pursuant to a letter of intent, memorandum of
understanding, confidentiality agreement or other similar evidence
of active negotiation concerning a potential transaction or event
which, if consummated, would constitute a Change in Control
(“Contemplated Change in Control”), in either case (i)
or (ii) above this Agreement shall not expire and the Term shall
automatically be extended to the earlier of (a) sixty (60) days
after a formal decision by Company or the third party to cease
negotiations concerning such Contemplated Change in Control, such
formal decision to be evidenced by correspondence between Company
and the third party, or a resolution of the Board of Directors or a
committee thereof; or (b) one (1) year following the consummation
of the Change in Control described in clause (i) above or resulting
from such negotiation as described in clause (ii)
above.
2.2
Company’s Right to Terminate
. Notwithstanding
the provisions of paragraph 2.1, Company shall have the right to
terminate Executive’s employment under this Agreement at any
time for any of the following reasons:
(a)
upon
Executive’s death;
(b)
upon
Executive’s becoming disabled within the meaning of
Company’s Long-Term Disability Plan, provided such plan
requires Executive to be unable to perform his duties
hereunder due to sickness or injury for a period of at least
180 consecutive days (a
“Disability”);
(c)
if,
in carrying out his duties hereunder, Executive engages in
conduct that constitutes (i) a breach of his fiduciary duty to
Company or its shareholders, (ii) gross neglect or (iii) gross
misconduct resulting, in any case, in material economic harm
to Company, or upon the conviction of Executive for a felony
or other crime involving moral turpitude; or
(d)
for
any other reason whatsoever, in the sole discretion of
Company.
For
purposes of this Agreement, a termination by Company under
clause (c) above shall constitute a termination by Company for
“Cause.” Notwithstanding the foregoing, Company
may not terminate Executive’s employment for Cause
unless Company has provided Executive with written notice
specifying the reason(s) for such termination, and if the
circumstances surrounding such termination may be cured by
Executive, Company has given Executive a period of not less
than thirty (30) days from the date of such notice during
which Executive has failed to cure the matter to the
reasonable satisfaction of Company.
2.3
Executive’s Right to Terminate
.
Notwithstanding
the provisions of paragraph 2.1, Executive shall have the right to
terminate his employment under this Agreement at any time for any
of the following reasons:
(a)
the
assignment to Executive of duties materially inconsistent with
the duties associated with the position described in paragraph
1.2 as such duties are constituted as of the Effective Date,
or the removal of him from any such positions;
(b)
a
material diminution in the nature or scope of
Executive’s authority, responsibilities, or titles from
those applicable to him as of the Effective Date;
(c)
the
occurrence of acts or conduct on the part of Company or any of
its affiliates, or their board of directors, officers,
representatives or stockholders, which prevent Executive from,
or substantively hinder Executive in, performing his duties or
responsibilities pursuant to this Agreement;
(d)
Company
requiring Executive’s permanent office to be located
more than fifty (50) miles from its current
location;
(e)
the
taking of any action by Company that would materially
adversely affect the corporate amenities enjoyed by Executive
on the Effective Date;
(f)
a
material breach by Company of any provision of this Agreement
which, if correctable, remains uncorrected for 30 days
following written notice by Executive of such breach to
Company, it being agreed that any reduction in
Executive’s then current annual base salary, any
reduction in Executive’s Target Bonus (as defined below)
or any failure to make the annual awards provided for in
Section 3.5, shall constitute a material breach by Company of
this Agreement; and
(g)
for
any other reason whatsoever, in the sole discretion of
Executive.
For
purposes of this Agreement: (i) a termination of employment by
Executive under any of clauses (a) through (f), shall
constitute a termination of employment by Executive for
“Good Reason;” and (ii) a termination of
employment by Executive under clause (g) above shall
constitute a termination of employment by Executive
“without Good Reason.”
2.4
Notice of Termination
. Notwithstanding the provisions in Section 2.1 relating
to the Term of this Agreement, if Company or Executive desires to
terminate Executive’s employment hereunder at any time prior
to expiration of the term of employment as provided in paragraph
2.1, it or he shall do so by giving written notice to the other
party that it or he has elected to terminate Executive’s
employment hereunder and stating the effective date and reason for
such termination, provided that no such action shall alter or amend
any other provisions hereof or rights arising
hereunder.
2.5
Liability for Damages .
Notwithstanding
anything herein to the contrary, Company agrees not to pursue any
claim against Executive resulting from Executive’s
termination of this Agreement prior to the expiration of the
Term.
ARTICLE
3:
COMPENSATION AND BENEFITS
3.1
Base Salary
. During the Term, Executive shall receive an annual base
salary equal to $190,000.00, or such higher amounts as determined
in the sole discretion of Company. Executive’s annual base
salary shall be paid in equal installments in accordance with
Company’s standard policy regarding payment of compensation
to executives.
3.2
Special Signing Bonus
. On, or before Executive’s second pay period of
employment, Company shall make a lump-sum cash payment to Executive
in the amount of $75,000.00.
3.3
Relocation Expenses .
The
Company will reimburse Executive for reasonable expenses associated
with relocating to Dallas, Texas, pursuant to the policy attached
hereto as Exhibit 1 (“Policy”), except that
Section IV (2) of the Policy is hereby amended and incorporated by
reference to provide that “the total number of lodging nights
under Plan Section II and Plan Section IV combined shall not exceed
sixty (60) days.”
3.4
Annual Bonus
. In addition to the base salary, during each calendar
year during the Term commencing with calendar year 2004, Executive
shall have the opportunity to earn an annual cash bonus
(“Bonus”) under and subject to the terms and conditions
of the TXU Annual Incentive Plan (“AIP”). For purposes
of this Agreement, Executive’s “Target Bonus” for
calendar year 2004 shall be 40% of Executive’s annualized
base salary. For each succeeding calendar year in the Term,
Executive’s Target Bonus shall be 40% of Executive’s
base salary. To the extent the limitation on awards provided for
under the AIP would limit the amount of the Bonus contemplated
herein, any amount over and above such AIP limit will be paid by
Company contemporaneously with the payment under the
AIP.
3.5
Annual Long-Term Incentive Compensation Grants
. Executive
will be entitled to receive annual performance-based awards under
and subject to the terms of the TXU Long-Term Incentive
Compensation Plan (“LTICP”) each year during the Term
of this Agreement commencing in 2004. The annual LTICP award for
2004 shall have a target value of 5,000 shares of TXU Corp. common
stock, and the annual LTICP award for each succeeding year during
the Term of this Agreement shall have a target value of not less
than 5,000 shares of TXU Corp. common stock. The initial LTICP
award for 2004 shall be made as soon as reasonably practical
following the Effective Date and shall be on terms and conditions
consistent with other 2004 annual LTICP awards made to executive
officers. The annual award for each succeeding year will be made
following, and in connection with, the executive officer annual
review by the Organization & Compensation Committee of the
Board of Directors of TXU Corp. (“O&C Committee”).
Except as expressly described herein, all such LTICP awards shall
be subject to terms, conditions and restrictions comparable to
those contained in awards granted for the corresponding year to
executive officers under the LTICP, or such other terms, conditions
and restrictions as may be approved by the O&C Committee with
the concurrence of Executive.
As
the following chart illustrates, and notwithstanding any
provisions of the LTICP to the contrary, performance for all
Performance-Based Restricted Stock Awards granted under this
Section 3.5 shall be measured by TXU Corp.’s total
shareholder return (“TSR”) relative to the other
companies that comprise the Standard and Poors 500 Electric
Utilities Index (“SPELEC”) over the performance
period. Minimum, target and maximum performance levels are set
in terms of TXU Corp.’s TSR performance against the
SPELEC quartiles.
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Performance
Levels
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Zero
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Minimum
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Target
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125%
of
Target
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150%
of
Target
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Maximum
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TSR
Ranges
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40.99
th Percentile
and below
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41
st to
50.99
th percentiles
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51
st to
60.99
th percentiles
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61
st to
70.99
th percentiles
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71
st to
80.99
th percentiles
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81
st percentile
and above
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Payouts
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No
payout
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Interpolate
between Minimum and Target (50% to 100% of
Target)
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Interpolate
between 100% of Target and 125% of Target
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Interpolate
between 125% of Target and 150% of Target
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Interpolate
between 150% of Target and Maximum (150% and 200% of
Target)
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Maximum
payout (200% of Target)
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Except
as provided in Section 4.3, once such awards have been
granted, they shall be paid in full at the end of the relevant
performance period based on actual performance regardless of
whether Executive’s employment has previously
terminated. In the event Executive’s employment with
Company terminates prior to any of the above-described awards
being granted to Executive, such awards shall be subject to
the provisions of Article 4 herein.
Company
shall, if Executive so requests, satisfy any income tax
withholding obligations in respect of the payment of any
amounts under the LTICP by withholding amounts otherwise
issuable to Executive under such award.
3.6
Vacation and Sick Leave
. During each year of his employment, Executive shall be
entitled to vacation and sick leave benefits equal to the maximum
available to any Company executive, determined without regard to
the period of service that might otherwise be necessary to entitle
Executive to such vacation or sick leave under standard Company
policy.
3.7
Other Employee Benefits
. Executive shall be entitled to participate in all of
Company’s employee benefit plans, programs, arrangements and
fringe benefit policies made available to similarly situated senior
executives of the Company to the extent he is qualified to do so by
virtue of his employment with Company, subject to the terms,
conditions and limitations of such plans, arrangements and
policies, as they may be amended from time to time.
3.8
Other Perquisites
. During his employment hereunder, Executive shall be
afforded the following benefits as incidences of his
employment:
(a)
Business
and Entertainment Expenses - Subject to Company’s
standard policies and procedures with respect to expense
reimbursement as applied to its executive employees generally,
Company shall reimburse Executive for, or pay on behalf
of Executive,
reasonable and appropriate expenses incurred by Executive for
business related purposes, including dues and fees to industry
and professional organizations, bar related expenses, costs of
entertainment and business development, and costs reasonably
incurred as a result of Executive’s spouse accompanying
Executive on business travel.
(b)
Parking
- Company shall provide at no expense to Executive a reserved
parking place convenient to Executive’s headquarters
office.
ARTICLE
4:
EFFECT OF TERMINATION ON COMPENSATION
4.1
By Expiration of Term
. If Executive’s employment hereunder shall
terminate upon expiration of the Term, then all compensation and
all benefits to Executive hereunder shall terminate
contemporaneously with termination of his employment, except
that:
(a)
Company
shall pay to Executive all Accrued Obligations (as defined
below in Section 4.8) in a lump sum in cash within thirty (30)
days after the date of termination of Executive’s
employment (the “Date of Termination”). For the
avoidance of doubt, salary, annual bonus, vacation and sick
leave, other employee benefits (except for COBRA Coverage (as
defined below)) and other perquisites shall cease to accrue as
of the Date of Termination.
(b)
Company
shall pay Executive a pro rata annual Bonus for the year of
termination based on actual performance at the time when
bonuses are paid to senior executives generally.
(c)
All
outstanding awards which had been made to Executive pursuant
to Section 3.5 (for purposes of this Article 4, “LTICP
Awards”) shall not be forfeited and shall be paid at the
times and in the amounts provided for in, and subject to the
terms and conditions of, such awards.
(d)
Company
shall provide Executive and his eligible dependents with
continuous health care coverage under and subject to the
provisions of the Consolidated Omnibus Budget Reconciliation
Act of 1985 (“COBRA Coverage”) at the prevailing
active employee rate for up to eighteen (18) months from such
termination.
(e)
Company’s
obligations under Sections 4.6 and 5.1 shall
continue.
(f)
Company
shall pay any amounts owed but unpaid to Executive under any
plan, policy or program of Company as of the Date of
Termination at the time provided by, and in accordance with
the terms of, such plan, policy or program, including any
annual Bonus earned in the prior calendar year or a portion
thereof as described in Section 3.4.
4.2
By Company Without Cause or By Executive for Good Reason Prior to
Expiration of Term
. If Executive’s employment hereunder shall be
terminated by Company without
Cause, or by Executive for Good Reason, prior to the expiration of
the Term then, upon such termination, the payments and benefits
described below will be provided to Executive, or in the event of
Executive’s death, to his spouse (or his estate if he is not
married or his spouse does not survive him):
(a)
Company
shall pay to the Executive all Accrued Obligations in a lump
sum in cash within thirty (30) days after the Date of
Termination. For the avoidance of doubt, salary, annual bonus,
vacation and sick leave, other employee benefits (except
for COBRA
Coverage and retiree medical) and other perquisites shall
cease to accrue as of the Date of Termination.
(b)
Company
shall immediately pay Executive a lump sum payment equal to
the then current annualized base salary provided for under
Section 3.1 and the Target Bonuses due as described in Section
3.4, through the remainder of the Term, provided that the lump
sum shall not be less than the sum of Executive’s
annualized base salary and Target Bonus.
(c)
All
outstanding LTICP Awards shall be paid at the times and in the
amounts provided for in, and subject to the terms and
conditions of, such awards. Additionally, all ungranted LTICP
Awards that would have been made to Executive pursuant to
Section 3.5 on or prior to the expiration date of the Term
shall be immediately granted. The performance period for each
such previously ungranted LTICP Award shall be the performance
period that would have applied had the award been made at the
time provided for in Section 3.5. Each such previously
ungranted LTICP Award shall be delivered or paid following the
applicable performance period in accordance with the terms of
the award.
(d)
Company
shall pay Executive an amount equal to: (i) the forfeited
portion of Executive’s accounts under the TXU Deferred
and Incentive Compensation Plan (“DICP”) and the
TXU Salary Deferral Program (“SDP”) (valued as of
the date of such termination in accordance with the valuation
methodology used under such plans); and (ii) the matching
contributions which would have been made on behalf of
Executive under the DICP had Executive continued to defer
salary under the DICP at the rate in effect as of the date of
such termination for an additional twelve (12)
months.
(e)
Company
shall provide Executive and his eligible dependents with COBRA
Coverage at the prevailing active employee rate for up to
eighteen (18) months from such termination.
(f)
Company’s
obligations under Sections 4.6 and 5.1 shall
continue.
(g)
Company
shall pay any amounts owed but unpaid to Executive under any
plan, policy or program of Company as of the date of
termination at the time provided by, and in accordance with
the terms of, such plan, policy or program, including any
unpaid annual Bonus earned in the prior calendar year or
portion thereof as described in Section 3.4.
4.3
By Executive Without Good Reason or By Company for
Cause
. If Executive’s employment hereunder shall be
terminated by Company for Cause or by Executive without Good
Reason, then all
compensation
and benefits to Executive hereunder shall terminate
contemporaneously with the termination of such employment, except
that:
(a)
Company
shall pay to Executive all Accrued Obligations in a lump sum
in cash within thirty (30) days after the Date of Termination.
For the avoidance of doubt, salary, annual bonus, vacation and
sick leave, other employee benefits (except for
COBRA
Coverage) and other perquisites shall cease to accrue as of
the Date of Termination.
(b)
Company
shall provide Executive and his eligible dependents with COBRA
Coverage at the prevailing COBRA rate for up to eighteen (18)
months from such termination.
(c)
Company’s
obligations under Sections 4.6 and 5.1 shall
continue.
(d)
Company
shall pay any amounts owed but unpaid to Executive under any
plan, policy or program of Company as of the date of
termination at the time provided by, and in accordance with
the terms of, such plan, policy or program, including any
annual Bonus earned in the prior calendar year or portion
thereof as described in Section 3.4.
(e)
Any
unvested or ungranted LTICP awards described in Section 3.5
shall be forfeited.
4.4
Upon Executive’s Death or Disability
. In
the event of Executive’s death or Disability during the Term,
this Agreement shall terminate, and Executive, or Executive’s
spouse in the event of his death (or his estate in the event he is
not married or his spouse does not survive him) will be entitled to
receive the following:
(a)
Company
shall pay to the Executive all Accrued Obligations in a lump
sum in cash within thirty (30) days after the Date of
Termination. For the avoidance of doubt, salary, annual bonus,
vacation and sick leave, other employee benefits (except for
COBRA Coverage) and other perquisites shall cease to accrue as
of the Date of Termination.
(b)
Company
shall immediately pay Executive (or Executive’s
surviving spouse or estate, as the case may be) a lump sum
payment equal to the sum of Executive’s then current
annualized base salary provided for under Section 3.1 plus the
Target Bonus defined in Section 3.4.
(c)
Company
shall pay Executive a pro rata annual Bonus for the year of
termination based on actual performance at the time when
bonuses are paid to senior executives generally.
(d)
All
outstanding LTICP Awards sha
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