Document/Exhibit Description Pages Size
1: 8-K Current Report 9 31K
2: EX-1 Underwriting Agreement 84 290K
3: EX-2 Plan of Acquisition, Reorganization, Arrangement, 18 68K
Liquidation or Succession
4: EX-3 Articles of Incorporation/Organization or By-Laws 18 68K
5: EX-4 Instrument Defining the Rights of Security Holders 1 5K
6: EX-5 Opinion re: Legality 30 63K
7: EX-6 Opinion re: Discount on Capital Shares 27 63K
8: EX-7 Opinion re: Liquidation Preference 37 118K
9: EX-8 Opinion re: Tax Matters 6 21K
EXHIBIT 6
EMPLOYMENT AGREEMENT
THIS AGREEMENT by and between _____________________,
a Wisconsin corporation (the "Company"), and Richard A. Abdoo
(the "Executive"), dated as of the ___ day of _________, 199_.
W I T N E S S E T H T H A T
WHEREAS, Northern States Power Company, a Minnesota
corporation ("NSP") and Wisconsin Energy Corporation, a Wis-
consin corporation ("WEC") have entered into an Agreement and
Plan of Merger dated as of April 28, 1995 (the "Merger Agree-
ment"), whereby the NSP and WEC organizations will merge, with
the Company as the surviving parent; and
WHEREAS, NSP and WEC wish to provide for the orderly
succession of management of the Company following the Effective
Time (as defined in the Merger Agreement); and
WHEREAS, NSP and WEC further wish to provide for the
employment by the Company of the Executive, and the Executive
wishes to serve the Company, in the capacities and on the terms
and conditions set forth in this Agreement;
NOW, THEREFORE, it is hereby agreed as follows:
1. Employment Period. The Company shall employ the
Executive, and the Executive shall serve the Company, on the
terms and conditions set forth in this Agreement, for an ini-
tial period (the "Initial Period") and a further period (the
"Secondary Period") (the Initial Period and the Secondary
Period are hereinafter referred to in the aggregate as the
"Employment Period"). The Initial Period shall begin at the
Effective Time (as defined in the Merger Agreement), and end on
the earlier of: (i) such date as James J. Howard ceases to be
Chief Executive Officer of the Company for any reason; or (ii)
the later of (a) the date of the annual meeting of shareholders
of the Company that occurs in 1998, and (b) the last day of the
sixteenth full month following the Effective Time. The Sec-
ondary Period shall begin at the end of the Initial Period and
end on that date which is the later of: (x) January 31, 2002;
or (y) five (5) years after the first day of the Initial
Period; except that on the third, fourth and fifth anniver-
saries of the first day of the Employment Period, the Secondary
Period shall be extended by one year unless either party gives
written notice to the other, at least 60 days before the Sec-
ondary Period would otherwise be so extended, that the Second-
ary Period shall not be so extended.
2. Position and Duties. (a) During the Initial
Period, the Executive shall serve as Vice Chairman of the Board
of Directors of the Company (the "Board"), President and Chief
Operating Officer of the Company; during the Secondary Period,
the Executive shall serve as Vice Chairman of the Board, Pres-
ident and Chief Executive Officer of the Company; and on and
after any date during the Employment Period as of which
James J. Howard ceases to be Chairman of the Board, the Execu-
tive shall serve as the Chairman of the Board; in each case
with such duties and responsibilities as are customarily
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assigned to such positions, and such other duties and respon-
sibilities not inconsistent therewith as may from time to time
be assigned to him by the Board. The Executive shall be a
member of the Board on the first day of the Employment Period,
and the Board shall propose the Executive for re-election to
the Board throughout the Employment Period.
(b) During the Initial Period: (i) as is cus-
tomary, the Executive shall report to the Chief Executive
Officer of the Company; (ii) the subsidiary of the Company that
provides administrative and other services to the Company's
utility company subsidiaries (the "Service Company"), as well
as the Company's subsidiary NRG Energy Inc. ("NRG"), and their
respective chief executive officers, shall report to the Chief
Executive Officer of the Company; and (iii) all other subsid-
iaries of the Company (other than the Service Company and NRG),
and their respective chief executive officers, shall report to
the Executive.
(c) During the Employment Period, and excluding
any periods of vacation and sick leave to which the Executive
is entitled, the Executive shall devote reasonable attention
and time during normal business hours to the business and
affairs of the Company and, to the extent necessary to dis-
charge the responsibilities assigned to the Executive under
this Agreement, use the Executive's reasonable best efforts to
carry out such responsibilities faithfully and efficiently. It
shall not be considered a violation of the foregoing for the
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Executive to serve on corporate, industry, civic or charitable
boards or committees, so long as such activities do not sig-
nificantly interfere with the performance of the Executive's
responsibilities as an employee of the Company in accordance
with this Agreement.
(d) The Company's headquarters shall be located
in Minneapolis, Minnesota and the Executive shall reside in the
general area of the Twin Cities of Minneapolis and St. Paul,
Minnesota. The Company shall assure that the Executive suffers
no financial loss on the sale of Executive's Milwaukee resi-
dence (including the value of loss of tax deferrals which may
occur if Executive does not reinvest all of the proceeds of the
sale of such residence in accordance with the provisions of
Section 1034 of the Internal Revenue Code of 1986, as amended
and a gross up payment for the additional income taxes payable
by the Executive as a result of such payment). The Company
shall reimburse the Executive for all of his moving expenses
incurred in relocating Executive's residence to the Twin Cities
area. During the period from the first day of the Employment
Period through the earlier of the end of the last day of the
sixth full calendar month of the Employment Period and the date
of such relocation, the Company shall provide the Executive
with an apartment in the Twin Cities area and reimburse him for
reasonable expenses while in the Twin Cities area and travel
between the Twin Cities area and his principal residence, pro-
vided in each case that the Executive complies with the poli-
cies, practices and procedures of the Company for submission of
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expense reports, receipts, or similar documentation of such
expenses.
3. Compensation. (a) Base Salary. The Execu-
tive's compensation during the Employment Period shall be
determined by the Board upon the recommendation of the Compen-
sation Committee of the Board, subject to the next sentence and
Section 3(b). During the Employment Period, the Executive
shall receive an annual base salary ("Annual Base Salary") of
not less than his annual base salary from WEC as in effect
immediately before the Effective Time. The Annual Base Salary
shall be payable in accordance with the Company's regular pay-
roll practice for its senior executives, as in effect from time
to time. During the Employment Period, the Annual Base Salary
shall be reviewed for possible increase at least annually. Any
increase in the Annual Base Salary shall not limit or reduce
any other obligation of the Company under this Agreement. The
Annual Base Salary shall not be reduced after any such in-
crease, and the term "Annual Base Salary" shall thereafter
refer to the Annual Base Salary as so increased.
(b) Incentive Compensation. During the
Employment Period, the Executive shall participate in short-
term incentive compensation plans and long-term incentive com-
pensation plans (the latter to consist of plans offering stock
options, restricted stock and other long-term incentive com-
pensation) providing him with the opportunity to earn, on a
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year-by-year basis, short-term and long-term incentive compen-
sation (the "Incentive Compensation") at least equal to the
amounts that he had the opportunity to earn under the compa-
rable plans of WEC as in effect immediately before the Effec-
tive Time.
(c) Other Benefits. (i) Supplemental Execu-
tive Retirement Plan. During the Employment Period, the Exec-
utive shall participate in a supplemental executive retirement
plan ("SERP") such that the aggregate value of the retirement
benefits that he and his spouse will receive at the end of the
Employment Period under all defined benefit plans of the Com-
pany and its affiliates (whether qualified or not) will be not
less than the benefits he would have received had he continued,
through the end of the Employment Period, to participate in the
WEC Defined Benefit Pension Plan, Supplemental Executive
Retirement Plan A, Supplemental Executive Retirement Plan B,
the special supplemental benefits letter dated November 21,
1994 as amended on April 26, 1995 between WEC and the Execu-
tive, and Executive Deferred Compensation Plan (collectively,
the "WEC Plans"), as in effect immediately before the Effective
Time. The Company shall maintain and fund one or more grantor
trusts (the "Trusts"), the assets of which shall at all times
be adequate to provide for the payment of all benefits under
the SERP to the Executive and his spouse, as well as any elec-
tive deferrals of Incentive Compensation by the Executive (with
such adequacy being determined by an independent consulting
firm acceptable to the Executive, whose fees shall be paid by
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the Company). The assets of the Trusts shall be subject to the
claims of the Company's creditors, and the Trusts shall in all
other respects be designed to prevent the Executive and his
spouse from being taxed on the assets or income thereof, except
as and when such assets or income are paid to them.
(ii) During the Employment Period, the
Company shall provide the Executive with life insurance cover-
age (the "Life Insurance Coverage") providing a death benefit
to such beneficiary or beneficiaries as the Executive may des-
ignate of not less than three times his Annual Base Salary.
(iii) In addition, and without limiting the
generality of the foregoing, during the Employment Period and
thereafter: (A) the Executive shall be entitled to participate
in all applicable incentive, savings and retirement plans,
practices, policies and programs of the Company to the same
extent as other senior executives (or, where applicable,
retired senior executives) of the Company, and (B) the Execu-
tive and/or the Executive's family, as the case may be, shall
be eligible for participation in, and shall receive all bene-
fits under, all applicable welfare benefit plans, practices,
policies and programs provided by the Company, other than sev-
erance plans, practices, policies and programs but including,
without limitation, medical, prescription, dental, disability,
salary continuance, employee life insurance, group life insur-
ance, accidental death and travel accident insurance plans and
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programs, to the same extent as other senior executives (or,
where applicable, retired senior executives) of the Company.
(d) Fringe Benefits. During the Employment
Period, the Executive shall be entitled to receive fringe ben-
efits on the same terms and conditions as he received such
fringe benefits from WEC immediately before the Effective Time.
4. Termination of Employment. (a) Death or Dis-
ability. The Executive's employment shall terminate automati-
cally upon the Executive's death during the Employment Period.
The Company shall be entitled to terminate the Executive's
employment because of the Executive's Disability during the
Employment Period. "Disability" means that (i) the Executive
has been unable, for a period of 180 consecutive business days,
to perform the Executive's duties under this Agreement, as a
result of physical or mental illness or injury, and (ii) a
physician selected by the Company or its insurers, and accept-
able to the Executive or the Executive's legal representative,
has determined that the Executive's incapacity is total and
permanent. A termination of the Executive's employment by the
Company for Disability shall be communicated to the Executive
by written notice, and shall be effective on the 30th day after
receipt of such notice by the Executive (the "Disability
Effective Date"), unless the Executive returns to full-time
performance of the Executive's duties before the Disability
Effective Date.
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(b) By the Company. (i) The Company may ter-
minate the Executive's employment during the Employment Period
for Cause or without Cause. "Cause" means:
A. the willful and continued failure of
Executive substantially to perform the Executive's
duties under this Agreement (other than as a
result of physical or mental illness or injury),
after the Board of the Company delivers to the
Executive a written demand for substantial per-
formance that specifically identifies the manner
in which the Board believes that the Executive has
not substantially performed the Executive's
duties; or
B. illegal conduct or gross misconduct by
the Executive, in either case that is willful and
results in material and demonstrable damage to the
business or reputation of the Company.
No act or failure to act on the part of the Executive shall be
considered "willful" unless it is done, or omitted to be done,
by the Executive in bad faith or without reasonable belief that
the Executive's action or omission was in the best interests of
the Company. Any act or failure to act that is based upon
authority given pursuant to a resolution duly adopted by the
Board, or the advice of counsel for the Company, shall be con-
clusively presumed to be done, or omitted to be done, by the
Executive in good faith and in the best interests of the Com-
pany.
(ii) A termination of the Executive's
employment for Cause shall be effected in accordance with the
following procedures. The Company shall give the Executive
written notice ("Notice of Termination for Cause") of its
intention to terminate the Executive's employment for Cause,
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setting forth in reasonable detail the specific conduct of the
Executive that it considers to constitute Cause and the spe-
cific provision(s) of this Agreement on which it relies, and
stating the date, time and place of the Special Board Meeting
for Cause. The "Special Board Meeting for Cause" means a meet-
ing of the Board called and held specifically for the purpose
of considering the Executive's termination for Cause, that
takes place not less than ten and not more than twenty business
days after the Executive receives the Notice of Termination for
Cause. The Executive shall be given an opportunity, together
with counsel, to be heard at the Special Board Meeting for
Cause. The Executive's termination for Cause shall be effec-
tive when and if a resolution is duly adopted at the Special
Board Meeting for Cause by affirmative vote of a majority of
the entire membership of the Board, excluding employee direc-
tors, stating that in the good faith opinion of the Board, the
Executive is guilty of the conduct described in the Notice of
Termination for Cause, and that conduct constitutes Cause under
this Agreement.
(iii) A termination of the Executive's
employment without Cause shall be effected in accordance with
the following procedures. The Company shall give the Executive
written notice ("Notice of Termination without Cause") of its
intention to terminate the Executive's employment without
Cause, stating the date, time and place of the Special Board
Meeting without Cause. The "Special Board Meeting without
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Cause" means a meeting of the Board called and held specifi-
cally for the purpose of considering the Executive's termina-
tion without Cause, that takes place not less than ten and not
more than twenty business days after the Executive receives the
Notice of Termination without Cause. The Executive shall be
given an opportunity, together with counsel, to be heard at the
Special Board Meeting without Cause. The Executive's termina-
tion without Cause shall be effective when and if a resolution
is duly adopted at the Special Board Meeting without Cause by
affirmative vote of a majority of the entire membership of the
Board, excluding employee directors, stating that the Executive
is terminated without Cause.
(c) Good Reason. (i) The Executive may ter-
minate employment for Good Reason or without Good Reason.
"Good Reason" means:
A. the assignment to the Executive of any
duties inconsistent in any respect with para-
graph (a) of Section 2 of this Agreement, or any
other action by the Company that results in a
diminution in the Executive's position, author-
ity, duties or responsibilities, other than an
isolated, insubstantial and inadvertent action
that is not taken in bad faith and is remedied
by the Company promptly after receipt of notice
thereof from the Executive;
B. any failure by the Company to comply
with any provision of Section 3 of this Agree-
ment, other than an isolated, insubstantial and
inadvertent failure that is not taken in bad
faith and is remedied by the Company promptly
after receipt of notice thereof from the Execu-
tive;
C. any requirement by the Company that
the Executive's services be rendered primarily
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at a location or locations other than that pro-
vided for in paragraph (d) of Section 2 of this
Agreement;
D. any purported termination of the
Executive's employment by the Company for a
reason or in a manner not expressly permitted by
this Agreement; or
E. any failure by the Company to comply
with paragraph (c) of Section 11 of this Agree-
ment; or
F. any other substantial breach of this
Agreement by the Company that either is not
taken in good faith or is not remedied by the
Company promptly after receipt of notice thereof
from the Executive.
(ii) A termination of employment by the
Executive for Good Reason shall be effectuated by giving the
Company written notice ("Notice of Termination for Good Rea-
son") of the termination, setting forth in reasonable detail
the specific conduct of the Company that constitutes Good Rea-
son and the specific provision(s) of this Agreement on which
the Executive relies. A termination of employment by the
Executive for Good Reason shall be effective on the fifth
business day following the date when the Notice of Termination
for Good Reason is given, unless the notice sets forth a later
date (which date shall in no event be later than 30 days after
the notice is given).
(iii) A termination of the Executive's
employment by the Executive without Good Reason shall be
effected by giving the Company written notice of the termina-
tion.
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(d) No Waiver. The failure to set forth any
fact or circumstance in a Notice of Termination for Cause, a
Notice of Termination without Cause or a Notice of Termination
for Good Reason shall not constitute a waiver of the right to
assert, and shall not preclude the party giving notice from
asserting, such fact or circumstance in an attempt to enforce
any right under or provision of this Agreement.
(e) Date of Termination. The "Date of Termina-
tion" means the date of the Executive's death, the Disability
Effective Date, the date on which the termination of the Exec-
utive's employment by the Company for Cause or without Cause or
by the Executive for Good Reason is effective, or the date on
which the Executive gives the Company notice of a termination
of employment without Good Reason, as the case may be.
5. Obligations of the Company upon Termination.
(a) Other Than for Cause, Death or Disability; Good Reason.
If, during the Employment Period, the Company terminates the
Executive's employment, other than for Cause or Disability, or
the Executive terminates employment for Good Reason, the Com-
pany shall continue to provide the Executive with the compen-
sation and benefits set forth in paragraphs (a), (b) and (c) of
Section 3 as if he had remained employed by the Company pursu-
ant to this Agreement through the end of the Employment Period
and then retired [at which time he will be treated as eligible
for all retiree welfare benefits and other benefits provided to
retired senior executives, as set forth in Section 3(c)(iii)];
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provided, that the Incentive Compensation for such period shall
be equal to the maximum Incentive Compensation that the Execu-
tive would have been eligible to earn for such period; pro-
vided, further that in lieu of stock options, restricted stock
and other stock-based awards, the Executive shall be paid cash
equal to the fair market value (without regard to any restric-
tions) of the stock options, restricted stock and other stock-
based awards that would otherwise have been granted; and pro-
vided, further, that to the extent any benefits described in
paragraph (c) of Section 3 cannot be provided pursuant to the
plan or program maintained by the Company for its executives,
the Company shall provide such benefits outside such plan or
program at no additional cost (including without limitation tax
cost) to the Executive and his family; and provided, finally,
that during any period when the Executive is eligible to
receive benefits of the type described in clause (B) of para-
graph (c)(iii) of Section 3 under another employer-provided
plan, the benefits provided by the Company under this paragraph
(a) of Section 5 may be made secondary to those provided under
such other plan. In addition to the foregoing, any restricted
stock outstanding on the Date of Termination shall be fully
vested as of the Date of Termination and all options outstand-
ing on the Date of Termination shall be fully vested and exer-
cisable and shall remain in effect and exercisable through the
end of their respective terms, without regard to the termina-
tion of the Executive's employment. The payments and benefits
provided pursuant to this paragraph (a) of Section 5 are
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intended as liquidated damages for a termination of the Execu-
tive's employment by the Company other than for Cause or Dis-
ability or for the actions of the Company leading to a termi-
nation of the Executive's employment by the Executive for Good
Reason, and shall be the sole and exclusive remedy therefor.
(b) Death and Disability. If the Executive's
employment is terminated by reason of the Executive's death or
Disability during the Employment Period, the Company shall pay
to the Executive or, in the case of the Executive's death, to
the Executive's designated beneficiaries (or, if there is no
such beneficiary, to the Executive's estate or legal represen-
tative), in a lump sum in cash within 30 days after the Date of
Termination, the sum of the following amounts (the "Accrued
Obligations"): (1) any portion of the Executive's Annual Base
Salary through the Date of Termination that has not yet been
paid; (2) an amount representing the Incentive Compensation for
the period that includes the Date of Termination, computed by
assuming that the amount of all such Incentive Compensation
would be equal to the maximum amount of such Incentive Compen-
sation that the Executive would have been eligible to earn for
such period, and multiplying that amount by a fraction, the
numerator of which is the number of days in such period through
the Date of Termination, and the denominator of which is the
total number of days in the relevant period; (3) any compensa-
tion previously deferred by the Executive (together with any
accrued interest or earnings thereon) that has not yet been
paid; and (4) any accrued but unpaid Incentive Compensation and
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vacation pay; and the Company shall have no further obligations
under this Agreement, except as specified in Section 6 below.
(c) By the Company for Cause; By the Executive
Other than for Good Reason. If the Executive's employment is
terminated by the Company for Cause during the Employment
Period, the Company shall pay the Executive the Annual Base
Salary through the Date of Termination and the amount of any
compensation previously deferred by the Executive (together
with any accrued interest or earnings thereon), in each case to
the extent not yet paid, and the Company shall have no further
obligations under this Agreement, except as specified in Sec-
tion 6 below. If the Executive voluntarily terminates employ-
ment during the Employment Period, other than for Good Reason,
the Company shall pay the Accrued Obligations to the Executive
in a lump sum in cash within 30 days of the Date of Termina-
tion, and the Company shall have no further obligations under
this Agreement, except as specified in Section 6 below.
6. Non-exclusivity of Rights. Nothing in this
Agreement shall prevent or limit the Executive's continuing or
future participation in any plan, program, policy or practice
provided by the Company or any of its affiliated companies for
which the Executive may qualify, nor, subject to paragraph (f)
of Section 12, shall anything in this Agreement 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. Vested benefits and other amounts that
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the Executive is otherwise entitled to receive under the
Incentive Compensation, the SERP, the Life Insurance Coverage,
or any other plan, policy, practice or program of, or any con-
tract or agreement with, the Company or any of its affiliated
companies on or after the Date of Termination shall be payable
in accordance with the terms of each such plan, policy, prac-
tice, program, contract or agreement, as the case may be,
except as explicitly modified by this Agreement.
7. Full Settlement. The Company's obligation to
make the payments provided for in, and otherwise to perform its
obligations under, this Agreement shall not be affected by any
set-off, counterclaim, recoupment, defense or other claim,
right or action that 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 miti-
gation of the amounts payable to the Executive under any of the
provisions of this Agreement and, except as specifically pro-
vided in paragraph (a) of Section 5 with respect to benefits
described in clause (B) of paragraph (c)(iii) of Section 3,
such amounts shall not be reduced, regardless of whether the
Executive obtains other employment.
8. 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 that the Executive obtains during the
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Executive's employment by the Company or any of its affiliated
companies and that is not public knowledge (other than as a
result of the Executive's violation of this Section 8) ("Con-
fidential Information"). The Executive shall not communicate,
divulge or disseminate Confidential Information at any time
during or after the Executive's employment with the Company,
except with the prior written consent of the Company or as
otherwise required by law or legal process. In no event shall
any asserted violation of the provisions of this Section 8
constitute a basis for deferring or withholding any amounts
otherwise payable to the Executive under this Agreement.
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 distribu-
tion by the Company to or for the benefit of the Executive
(whether paid or payable or distributed or distributable pur-
suant to the terms of this Agreement or otherwise, but deter-
mined 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 Internal Revenue Code of
1986, as amended (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 pay-
ment (a "Gross-Up Payment") in an amount such that after pay-
ment by the Executive of all taxes (including any interest or
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penalties imposed with respect to such taxes), including,
without limitation, any income taxes (and any interest and
penalties imposed with respect thereto) 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 paragraph (c)
of this Section 9, 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 a certified public accounting firm designated
by the Executive (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. Any
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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"), consis-
tent with the calculations required to be made hereunder. In
the event that the Company exhausts its remedies pursuant to
paragraph (c) of this Section 9 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 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
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such period that it desires to contest such claim, the Execu-
tive shall:
(i) give the Company any information reasonably
requested by the Company relating to such claim,
(ii) take such action in connection with con-
testing 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 pen-
alties) incurred in connection with such contest and shall
indemnify and hold the Executive harmless, on an after-tax
basis, for any Excise 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 paragraph (c) of
Section 9, the Company shall control all proceedings taken in
connection with such contest and, at its sole option, may pur-
sue or forego 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 con-
test the claim in any permissible manner, and the Executive
agrees to prosecute such contest to a determination before any
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administrative tribunal, in a court of initial jurisdiction and
in one or more appellate courts, as the Company shall deter-
mine; provided, however, that if the Company directs the Exec-
utive 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 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 provided,
further, that any extension of the statute of limitations
relating to payment of taxes for the taxable year of the Exec-
utive with respect to which such contested amount is claimed to
be due is limited solely to such contested amount. Further-
more, the Company's control of the contest shall be limited to
issues with respect to which a Gross-Up Payment would be pay-
able 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 paragraph (c) of
this Section 9, 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 paragraph
(c) of this Section 9) promptly pay to the Company the amount
of such refund (together with any interest paid or credited
thereon after taxes applicable thereto). If after the receipt
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by the Executive of an amount advanced by the Company pursuant
to paragraph (c) of this Section 9, 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 determi-
nation, 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. Attorneys' Fees. The Company agrees to pay, as
incurred, to the fullest extent permitted by law, all legal
fees and expenses that the Executive may reasonably incur as a
result of any contest (regardless of the outcome) by the Com-
pany, the Executive or others of the validity or enforceability
of or liability under, or otherwise involving, any provision of
this Agreement, together with interest on any delayed payment
at the applicable federal rate provided for in Section
7872(f)(2)(A) of the Code.
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.
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(b) This Agreement shall inure to the benefit
of and be binding upon the Company and its successors and
assigns.
(c) The Company shall 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 expressly to assume and agree to per-
form this Agreement in the same manner and to the same extent
that the Company would have been required to perform it if no
such succession had taken place. As used in this Agreement,
"Company" shall mean both the Company as defined above and any
such successor that assumes and agrees to perform this Agree-
ment, by operation of law or otherwise.
12. Miscellaneous. (a) This Agreement shall be
governed by, and construed in accordance with, the laws of the
State of Minnesota, 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 except by a written
agreement executed by the parties hereto or their respective
successors and legal representatives.
(b) All notices and other communications under
this Agreement 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 fol-
lows:
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If to the Executive:
If to the Company:
Attention: General Counsel
or to such other address as either party furnishes to the other
in writing in accordance with this paragraph (b) of Section 12.
Notices 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. If
any provision of this Agreement shall be held invalid or unen-
forceable in part, the remaining portion of such provision,
together with all other provisions of this Agreement, shall
remain valid and enforceable and continue in full force and
effect to the fullest extent consistent with law.
(d) Notwithstanding any other provision of this
Agreement, the Company may withhold from amounts payable under
this Agreement all federal, state, local and foreign taxes that
are required to be withheld by applicable laws or regulations.
(e) The Executive's or the Company's failure to
insist upon strict compliance with any provisions of, or to
assert any right under, this Agreement (including, without
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limitation, the right of the Executive to terminate employment
for Good Reason pursuant to paragraph (c) of Section 4 of this
Agreement) shall not be deemed to be a waiver of such provision
or right or of any other provision of or right under this
Agreement.
(f) The Executive and the Company acknowledge
that this Agreement supersedes any other agreement between them
concerning the subject matter hereof.
(g) The rights and benefits of the Executive
under this Agreement may not be anticipated, assigned, alien-
ated or subject to attachment, garnishment, levy, execution or
other legal or equitable process except as required by law.
Any attempt by the Executive to anticipate, alienate, assign,
sell, transfer, pledge, encumber or charge the same shall be
void. Payments hereunder shall not be considered assets of the
Executive in the event of insolvency or bankruptcy.
(h) This Agreement may be executed in several
counterparts, each of which shall be deemed an original, and
said counterparts shall constitute but one and the same
instrument.
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IN WITNESS WHEREOF, the Executive has hereunto set
the Executive's hand and, pursuant to the authorization of its
Board of Directors, the Company has caused this Agreement to be
executed in its name on its behalf, all as of the day and year
first above written.
Richard A. Abdoo
By
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Dates Referenced Herein
| Referenced-On Page |
|---|
| This ‘8-K’ Filing | | Date | | First | | Last | | | Other Filings |
|---|
| |  |
| | 1/31/02 | | 2 | | | | | None on these Dates |
| Filed on: | | 5/3/95 |
| For Period End: | | 4/28/95 | | 1 |
| | 4/26/95 | | 6 |
| | 11/21/94 | | 6 |
| List all Filings |
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