Exhibit 10(kk)
SEVERANCE AND RELEASE
AGREEMENT
This Severance and Release Agreement
(the “ Agreement ”) is entered into by and among
Luminant Holding Company LLC (the “ Company ”),
Energy Future Holdings Corp. (the parent entity of the Company,
“ Holdings ”), and Michael McCall (“
Executive ”). Executive and the Company are referred
to in this Agreement as the “ Parties
.”
RECITALS
WHEREAS , the Executive previously notified Company that
he has decided to terminate his employment with the Company for
Good Reason, as defined in the amended and restated employment
agreement between Executive and the Company dated June 6, 2008
(“Employment Agreement”);
WHEREAS , the Company has accepted Executive’s
resignation for Good Reason; and
WHEREAS , the Company and Executive desire to enter into
this Agreement setting forth the terms of Executive’s
separation from the Company.
NOW, THEREFORE
, in consideration of the promises
and mutual agreements in this Agreement, and for other good and
valuable consideration, the receipt and legal sufficiency which are
acknowledged, the Company and Executive agree as
follows:
ARTICLE 1
RESIGNATION AND TERMINATION OF
EMPLOYMENT
Effective 12:01 a.m. on
January 31, 2009 (the “ Separation Date ”),
Executive’s employment with the Company shall end and he
shall resign from all positions he held as an officer of the
Company and any entity that controls, is controlled by, or is under
common control with the Company (an “ Affiliate
”).
On or before the Separation Date,
Executive shall return all property of the Company and its
Affiliates, including all Confidential Information (as defined
below), in his possession. If Executive discovers, or comes into
possession of, any such Confidential Information after the
Separation Date, he shall promptly return it to the General Counsel
for Energy Future Holdings Corp.
ARTICLE 2
SEVERANCE PAYMENT AND
BENEFITS
|
|
a.
|
In
consideration for the promises contained in this Agreement, the
Company will provide Executive with the payments and benefits
described below:
|
|
|
(i)
|
Accrued Rights
. A one-time, lump-sum cash payment
for: a) Executive’s base salary through the Separation Date,
to the extent it has not already been paid, which shall be paid no
later than ten (10) business days
|
|
|
following the Separation Date; b)
Executive’s accrued and unused vacation days as of the
Separation Date, to the extent they remain unused and he has not
otherwise been paid for them, which shall be paid no later than ten
(10) business days following the Separation Date; c) $375,000
(representing Executive’s Annual Bonus Target, as defined in
the Employment Agreement), which shall be paid no later than ten
(10) business days following the Separation Date; d) any
expense reimbursements or other cash entitlements accrued by or
payable to Executive as of the Separation Date under the terms of
any applicable plan or policy to the extent they have not already
been paid and provided that such reimbursements are requested
within ninety (90) days following the Separation Date and are
supported by appropriate documentation, which reimbursements or
entitlements shall be payable no later than sixty (60) days
following the date of such request; and e) such employee benefits
or other amounts owed but unpaid to Executive that are provided for
under any plan, policy, program, or agreement between Holdings or
the Company and Executive and in accordance with the terms of such
plan, policy, program, or agreement.
|
|
|
(ii)
|
Retention
Bonus Payment . A
one-time, lump-sum cash payment of one million, seven hundred and
fifty thousand dollars ($1,750,000) which, under Section 5 of
the Employment Agreement, is not forfeited upon a termination for
Good Reason. Such payment shall be made within ten
(10) business days after the expiration of the Revocation
Period.
|
|
|
(iii)
|
COBRA . Provided Executive does not violate the
restrictions set forth in Article 5, below, Executive, his spouse,
and his eligible dependents (to the extent covered immediately
before the Separation Date) shall continue to be eligible to
participate in all of the Company’s group health plans on the
same terms and conditions as active employees of the Company until
the earlier of (x) two (2) years from the date of
termination of Executive’s employment (the “Severance
Period”), to the extent that Executive was eligible to
participate in such plans immediately prior to the date of
termination, or (y) until Executive is, or becomes, eligible
for comparable coverage under the group health plans of a
subsequent employer, provided that, if Executive continues to
receive benefits pursuant to this Section 2.1.a.(iii) during a
period of time during which, in the absence of the benefits
provided in this Section 2.1.a.(iii), Executive would not
otherwise be entitled to continuation coverage under
Section 4980B of the Internal Revenue Code of 1986, as amended
(the “Code”), Executive shall receive reimbursement for
all medical expenses on the date no later than the end of the
calendar year immediately following the calendar year in which the
applicable expenses have been incurred. The COBRA health care
continuation coverage period under Section 4980B of the Code,
or any replacement or successor provision of United States tax law,
shall run concurrently with the Severance Period.
|
2
|
|
b.
|
The Company and
Executive agree that the payments and benefits described in
Section 2.1.a. above shall be in lieu of any other separation,
severance incentive, or benefits offered under any plan, program,
or agreement (including the Employment Agreement) to which
Executive may have been, or to which Executive believes he may be,
entitled as a result of his employment with or separation from the
Company or any Affiliate. Any such payments shall be less any
applicable taxes and withholdings, deductions, or obligations,
including any amounts owed to the Company or an Affiliate by
Executive on any Company issued or sponsored travel or credit cards
or any other expenses or payments for which the Company is entitled
to be reimbursed by Executive.
|
|
|
a.
|
It is agreed
that, from and after the Separation Date, Executive shall not be
eligible to continue to participate in any employee benefit plan,
program, or policy sponsored by the Company or any Affiliate,
except for rights that have vested as of the Separation Date or as
specifically provided in this Agreement.
|
|
|
b.
|
Executive will
be entitled to receive a distribution of (or, in the case of stock
options, entitled to exercise) any vested awards or vested account
balances under, and subject to the provisions of, each of the
governing plan documents of the following employee benefit plans
and other terms described in the Employment Agreement:
|
|
|
(iii)
|
EFH Salary
Deferral Plan;
|
|
|
(iv)
|
EFH Health Care
and Life Insurance Plan; and
|
|
|
(v)
|
2007 Stock
Incentive Plan for Key Employees of Energy Future Holdings Corp.
and its Affiliates.
|
|
|
c.
|
As soon as
administratively possible but in no event later than thirty
(30) days following expiration of the Revocation Period, in
lieu of any rights Executive may have under the Deferred Share
Agreement dated October 9, 2007 between Executive and Texas
Energy Future Holdings Limited Partnership, the Company will pay to
Executive the amount of three million dollars ($3,000,000). Such
payment shall be subject to income tax withholding but not
withholding for FICA taxes.
|
3
ARTICLE 3
WAIVER AND
RELEASE
|
3.1
|
Release
of Company by Executive
|
Executive represents that he has not
filed any complaints of any kind whatsoever with any local, state,
federal, or governmental agency or court against the Company based
upon, or in any way related to, Executive’s employment with
the Company. Executive further represents that he understands that
the payments and benefits provided for in Article 2 constitute a
full and complete satisfaction of any claims, asserted or
unasserted, known or unknown, that Executive has or may have
against the Company or an Affiliate except as provided below. In
exchange for the payments to be made by the Company and benefits to
be received by Executive under this Agreement, Executive
individually and on behalf of Executive’s spouse, heirs,
successors, and assigns hereby agrees not to sue or instigate any
grievance, charge, claim, action, or suit, at law or in equity, and
unconditionally releases, dismisses, and forever discharges the
Company, including its predecessors, successors, parents,
subsidiaries, affiliated corporations, limited liability companies
and partnerships, including (but not limited to) Energy Future
Holdings Corp., Energy Future Competitive Holdings Company,
Luminant Holding Company LLC, Luminant Energy Services Company,
Luminant Mining Services Company, Luminant Power Services Company,
EFH Corporate Services Company, TXU Retail Services Company, Texas
Competitive Electric Holdings Company LLC, TXU Energy Retail
Company LLC, Luminant Energy Company LLC, TXU Energy Solutions
Company LLC, Oncor Electric Delivery Holdings Company LLC, Oncor
Electric Delivery Company LLC, Luminant Generation Company LLC,
Generation MT Company LLC, Generation SVC Company, Luminant Mining
Company LLC, and all of their employee benefit plans, officers,
directors, fiduciaries, employees, assigns, representatives,
agents, and counsel (collectively the “ Released
Parties ”) from any and all claims, demands, liabilities,
obligations, agreements, damages, debts, and causes of action
arising out of, or in any way connected with, Executive’s
employment with or separation from the Company or any of the
Released Parties. This waiver and release includes, but is not
limited to, all claims and causes of action arising under or
related to Title VII of the Civil Rights Act of 1964, as amended;
the Civil Rights Act of 1991; the Civil Rights Act of 1866;
Section 1981 of Title 42 of the United States Code, as
amended; the Age Discrimination in Employment Act of 1967, as
amended; the Americans with Disabilities Act; the Employee
Retirement Income Security Act of 1974, as amended;
Section 211 of the Energy Reorganization Act; the
Sarbanes-Oxley Act of 2002; the Older Workers Benefit Protection
Act of 1990; the Worker Adjustment and Retraining Notification Act;
the Occupational Safety and Health Act, as amended; the Family and
Medical Leave Act; the Texas Labor Code, including (but not limited
to) Chapter 451; the Texas Commission on Human Rights Act; all
state and federal statutes and regulations; all oral or written
contract rights, including any rights under any Company incentive
plan, program, or labor agreement; and all claims arising under
common law including breach of contract, tort, or for personal
injury of any sort.
Executive understands that this
Waiver and Release precludes him from recovering any relief as a
result of any lawsuit, grievance, or claim brought on his behalf
and arising out of his employment or separation from employment
with the Company. However, nothing in this Waiver and Release
restricts Executive in any way from truthful communications with,
filing a charge or complaint with, or full cooperation in the
investigations of, any governmental agency
4
on matters within their jurisdictions or from
cooperating with the Company in any internal investigation.
Furthermore, nothing in this Waiver and Release shall preclude any
claim relating to: (i) Executive’s rights under this
Agreement, (ii) Executive’s rights under Exhibit IV of
the Employment Agreement with respect to the imposition of excise
taxes imposed pursuant to Section 4999 of the Code
(“Excise Taxes”) arising by reason of or in connection
with the October 10, 2007 closing of the transactions
contemplated by the agreement and plan of merger among TXU Corp.,
Texas Energy Future Holdings Limited Partnership and Texas Energy
Future Merger Sub Corp ( the “Merger Agreement”),
(iii) any rights to indemnification (including any to
advancement or payment of defense and/or related legal costs) and
rights to coverage under director and officer liability insurance
under Section 10(h) of the Employment Agreement or
Section 6.11 of the Merger Agreement, and (iv) facts,
agreements, or causes of action arising after the date
hereof.
|
3.2
|
Release
of Executive by Company
|
The Company, on behalf of itself and
its Affiliates, hereby releases, discharges and agrees to indemnify
and hold harmless Executive from any and all claims and causes of
action that it or they may have against Executive arising out of
his employment with, or separation from, the Company or any
Affiliate. Such release, discharge, and indemnification does not
include claims for violation of any law, including any securities
law or willful misconduct (the Company acknowledges that it is not
aware of any such conduct as of the execution of this Agreement).
Company further acknowledges and agrees that Executive’s sole
obligations to Company from and after the Separation Date are set
forth in this Agreement and that, except as provided below, all
prior and contemporaneous agreements, whether written or oral, are
terminated and of no further force and effect as of the Separation
Date.
ARTICLE 4
CONSULTATION AND REVOCATION
PERIODS
Executive understands that signing
this Agreement, including the Waiver and Release described in
Article 3, is an important legal act. Executive acknowledges that
he has been advised to consult with legal counsel of his own
choosing in connection with the matters addressed in this
Agreement. Executive further acknowledges that he has twenty-one
(21) days from the day he received this offer to consider this
Agreement. Executive understands further that, for a period of
seven (7) days following his signing of this Agreement
(“ Revocation Period ”), he may revoke his
acceptance of the offer represented by this A
