Document:

exh10-1.htm

     

    
      

      

    

    

    
       
EXHIBIT
10.1

    

    

    
       
EXECUTION
COPY

    

    

    

    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.

     

    
      
        
        

      

      
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    (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”).

     

    
      
        
        

      

      
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    (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.

     

    
      
        
        

      

      
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    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.

     

    
      
        
        

      

      
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    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
remain employed as Chairman of the Board of the Company, this Agreement will
remain in full force and effect, subject to the provisions hereof governing his
employment solely as Chairman of the Board. In such event, the first sentence of
Section 3(a) and Sections 3(c), (e) and 4(d) shall no longer be
applicable.

    

    Section
8.            Payment Upon
Termination.

    

    (a)          If
the employment of the Executive is terminated pursuant to subsections (i) or
(iii) of Section 7(a), the Company will pay to the Executive, within 30 calendar
days, (x) any salary pursuant to Section 4(a) which is accrued but unpaid
through the Termination Date, and (y) a bonus payment, in an amount determined
by the Board by reference to the performance of the Executive for a portion of
the fiscal year of the Company before the Termination Date, which is not less
than the Minimum Bonus.

    

    (b)          If
the employment of the Executive is terminated pursuant to subsections (ii),
(iv), (v) or (vi) of Section 7(a), the Company will pay the Executive, on or
before the related Termination Date, an amount equal to three times the sum of
(1) the annual salary then in effect pursuant to Section 4, and (2) the greater
of (x) the Minimum Bonus or (y) an amount equal to the average Annual Bonus
Compensation payable to the Executive in respect of the two fiscal years
immediately preceding the fiscal year in which the Executive’s employment with
the Company terminates. In addition, (x) any portion of the options granted to
the Executive which would become vested within the next 36 months (beginning
with the month following the month in which the Termination Date occurs) will
vest immediately and may be exercised within the remaining term of the options
as provided in the applicable option agreements, and (y) the Company shall
continue in effect for Executive and his dependents, for a period of 36 months
after the Termination Date, the life insurance benefits, medical benefits and
dental benefits, the tax preparation and investment advisory services and any
other employee benefits made generally available to senior executives of the
Company on and after the date hereof through the end of the 36 month
post-termination period (except for disability plan benefits), subject to such
employee contributions and other terms and conditions as are applicable to
active employees generally and subject to subsequent modification or termination
of such plans to the extent such subsequent actions are also applicable to
active employees generally; provided that such plan benefits shall terminate
earlier on the date, if any, that comparable benefits are made available to the
Executive by any new employer (the “Continuation of Benefits”). To the degree
that any of the above employee benefit programs are not available to Executive
on account of his status as a non-employee after termination of employment, the
Company shall provide for economically equivalent programs during the 36 month
period or pay to executive a lump sum cash amount designed to allow him to
obtain economically equivalent benefits or put him in the same economic position
on an after tax basis (the “Economic Equivalent”). If it is determined that
benefits paid with respect to the extension of medical and dental benefits to
Executive would not be exempt from taxation under the Internal Revenue Code,
Company shall pay to Executive a lump sum cash payment within 2 1⁄2 months
following separation from service to allow him to obtain equivalent medical and
dental benefits and which would put him in the same after-tax economic
position.

     

    
      
        
        

      

      
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    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)
and the Executive’s employment is subsequently terminated pursuant to subsection
(ii), (iv), (v) or (vi) of Section 7(a), in lieu of the payments described
above, the Company shall (i) pay the Executive any due and payable salary
pursuant to Section 4(a) for his services rendered to the Company prior to the
termination of this Agreement, (ii) reimburse pursuant to Section 4(e) the
expenses incurred by the Executive prior to the termination of this Agreement,
(iii) pay the Executive the full amount of the aggregate annual salary that
would have been paid pursuant to Section 4(a) through the fifth anniversary of
the date he commenced his employment solely as Chairman of the Board, (iv)
provide for the immediate vesting and exercisability of all options awarded to
the Executive by the Company and (iv) provide for the Continuation of Benefits
through the fifth anniversary of the date he commenced his employment solely as
Chairman of the Board or the Economic Equivalent thereof.

    

    (c)          If
the employment of the Executive is terminated pursuant to subsections (ii),
(iv), (v) or (vi) of Section 7(a), all Performance Accelerated Stock Options
(“PASOs”) held by the Executive on the Termination Date will become vested and
immediately exercisable on such Termination Date, and shall otherwise remain
exercisable for their term in accordance with the terms thereof.

    

    (d)          If
the employment of the Executive is terminated pursuant to
subsections (ii), (iv), (v) or (vi) of Section 7(a), then without further action
by the Company, the Board or any committee thereof, the Executive may exercise
any vested stock options (including vested PASOs) held by the Executive pursuant
to existing procedures approved by the Compensation Committee for cashless
exercise, by surrendering previously owned shares, electing to have the Company
withhold shares otherwise deliverable upon exercise of such options, or by
providing an irrevocable direction to a broker to sell shares and deliver all or
a portion of the proceeds to the Company, in any case in an amount equal to the
aggregate exercise price and any tax withholding obligation attendant to the
exercise.

    

    (e)          If
the Executive relinquishes his position as Chief Executive Officer but offers to
remain employed as the Chairman of the Board of the Company pursuant to Section
7(c), the Company will pay the Executive, on or before the date he relinquishes
such position, a special achievement bonus which is equal to two times the sum
of (1) the annual salary then in effect pursuant to Section 4, and (2) the
greater of (x) the Minimum Bonus or (y) an amount equal to the average Annual
Bonus Compensation payable to the Executive in respect of the two fiscal years
immediately preceding the fiscal year in which the Executive relinquishes such
position. In addition to the foregoing, all options awarded by the Company to
the Executive that would become vested and exercisable during the two year
period following the date the Executive relinquishes his position as Chief
Executive Officer but offers to remain as Chairman of the Board pursuant to
Section 7(c) (the “Relinquishment Date”) shall become immediately vested and
exercisable as of the Relinquishment Date, and all remaining options that would
commence vesting in the period of time subsequent to such two-year period shall
commence vesting in accordance with their terms as of the Relinquishment
Date.

     

    
      
        
        

      

      
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    Section
8A.         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, distribution, waiver of Company rights,
acceleration of vesting of any stock options or restricted stock, or any other
payment or benefit in the nature of compensation to or for the benefit of the
Executive, alone or in combination (whether such payment, distribution, waiver,
acceleration or other benefit is made pursuant to the terms of this Agreement or
any other agreement, plan or arrangement providing payments or benefits in the
nature of compensation to or for the benefit of the Executive, but determined
without regard to any additional payments required under this Section 8A) (a
“Payment”) would be subject to the excise tax imposed by Section 4999 of the
Internal Revenue Code of 1986 (the “Code”) (or any successor provision) 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 payment (a “Gross-Up Payment”) in an
amount such that after payment by the Executive of all taxes with respect to the
Gross-Up Payment (including any interest or 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. Any Gross-Up Payment made by the
Company to the Executive with respect to any Excise Tax paid by the Executive
shall be made by the Company as soon as administratively feasible after the
determination of such Excise Tax, but in no case later than by the end of the
calendar year following the calendar year in which the Executive makes the
Excise Tax payment.

    

    (b)          Subject
to the provisions of Section 8A(c), all determinations required to be made under
this Section 8A, 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 Deloitte and Touche LLP, or
such other nationally recognized accounting firm then auditing the accounts of
the Company (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 unwilling or unable to perform its obligations pursuant to this Section
8A, the Executive shall appoint another nationally recognized accounting firm to
make the determinations required hereunder (which accounting firm shall then be
referred to hereunder as the Accounting Firm). All fees and expenses of the
Accounting Firm shall be borne solely by the Company. Any Gross-Up Payment,
determined pursuant to this Section 8A, shall be paid by the Company to the
Executive within five days of the receipt of the Accounting Firm’s
determination. Any determination by the Accounting Firm shall be binding upon
the Company and the Executive. The parties hereto acknowledge that, as a result
of the potential uncertainty in the application of Section 4999 of the Code (or
any successor provision) at the time of the initial determination by the
Accounting Firm hereunder, it is possible that the Company will not have made
Gross-Up Payments which should have been made consistent with the calculations
required to be made hereunder (an “Underpayment”). In the event that the Company
exhausts its remedies pursuant to Section 8A(c) 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.

     

    
      
        
        

      

      
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    (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 20 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 he 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 such period
that it desires to contest such claim, the Executive shall:

    

    (i)           give
the Company any information reasonably requested by the Company relating to such
claim,

    

    (ii)           take
such action in connection with contesting 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 penalties) 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 limiting the foregoing provisions of this Section 8A(c),
the Company shall control all proceedings taken in connection with such contest
and, at its sole option, may pursue or forgo 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 contest the claim in any permissible manner,
and the Executive agrees to prosecute such contest to a determination before any
administrative tribunal, in a court of initial jurisdiction and in one or more
appellate courts, as the Company shall determine; provided, however, that any
extension of the statute of limitations relating to payment of taxes for the
taxable year of the Executive with respect to which such contested amount is
claimed to be due is limited solely to such contested amount. Furthermore, the
Company’s control of the contest shall be limited to issues with respect to
which a Gross-Up Payment would be payable 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.

    
 

    
      
        
        

      

      
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Section 8B.         Restrictions on Payment to
“Specified Employees” under Section 409A of the Internal Revenue
Code.   In the event any payment to be made under this
Employment Agreement is subject to the provisions of Section 409A of the
Internal Revenue Code (and is not otherwise exempt under applicable guidance
issued under Section 409A), if such payment is due to the separation from
service of the Executive (other than because of death), and if the Executive is
a "specified employee" (as defined in Section 409A of the Internal Revenue Code)
at the time of separation from service, such payment shall not be made until the
date that is 6 months following the date of separation from
service.  In the event of any such delay in payment, interest shall be
added to the delayed payment utilizing the interest rate on 1-year constant
maturity U.S. Treasury Notes as published by the Federal Reserve Board (or its
successor) in Statistical Release H.15 (or its successor) corresponding to the
date that payment would have been made if the delay hereunder had not
occurred.

    

       
Section
9.           Remedies.

    

    (a)          The
Company will be entitled, if it elects, to enjoin any breach or threatened
breach of, or enforce the specific performance of, the obligations of the
Executive under Sections 3 or 6, without showing any actual damage or that
monetary damages would be inadequate. Any such equitable remedy will not be the
sole and exclusive remedy for any such breach, and the Company may pursue other
remedies for such a breach.

    

    (b)          Any
court proceeding to enforce this Agreement may be commenced in federal courts,
or in the absence of federal jurisdiction the state courts, located in Omaha,
Nebraska. The parties submit to the jurisdiction of such courts and waive any
objection which they might have to pursuit of any such proceeding of any such
court.

    

    (c)          Except
to the extent that the Company elects to seek injunctive relief in accordance
with subsection (a), any controversy or claim arising out of or relating to this
Agreement or the validity, interpretation, enforceability or breach of this
Agreement will be submitted to arbitration in Omaha, Nebraska, in accordance
with the then existing rules of the American Arbitration Association, and
judgment upon the award rendered in any such arbitration may be entered in any
court having jurisdiction.

    

    (d)          The
Company will pay, promptly upon request, any legal fees or expenses incurred by
the Executive in connection with any legal proceedings instituted by the company
to enforce the provisions of this Agreement against the Executive, but such
advances will be reimbursable to the Company, but only to the extent the Company
ultimately prevails in the proceeding (after any applicable appeals have been
exhausted).

    

    Section
10.          Assignment. Neither
the Company nor the Executive may sell, transfer or otherwise assign their
rights, or delegate their obligations, under this Agreement.

    

    Section
11.          Unfunded Benefits.
All compensation and other benefits payable to the Executive under this
Agreement will be unfunded, and neither the company nor any affiliate of the
Company will segregate any assets to satisfy any obligation of the Company under
this Agreement. The obligations of the Company to the Executive are not the
subject of any guarantee or other assurance of any Person other than the
Company.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    Section
12.         Severability. Should
any provision, paragraph, clause or portion thereof of this Agreement be
declared or be determined by any court or arbitrator of competent jurisdiction
to be illegal, unenforceable or invalid, the validity or enforceability of the
remaining parts, terms or provisions shall not be affected thereby and said
illegal or invalid part, term or provision shall be deemed not to be a part of
this Agreement. Alternatively, the court or arbitrator having jurisdiction shall
have the power to modify such illegal, unenforceable or invalid provision so
that it will be valid and enforceable, and, in any case, the remaining
provisions of this Agreement shall remain in full force and effect.

    

    Section
13.          Miscellaneous.

    

    (a)          This
Agreement may be amended or modified only by a writing executive by the
Executive and the Company.

    

    (b)          This
Agreement will be governed by and construed in accordance with the internal laws
of the State of Nebraska.

    

    (c)          This
Agreement constitutes the entire agreement of the Company and the Executive with
respect to the matters set forth in this Agreement and supersedes any and all
other agreements between the Company and the Executive relating to those
matters.

    

    (d)          Any
notice required to be given pursuant to this Agreement will be deemed given (i)
when delivered in person, or (ii) on the third calendar day after it is sent by
facsimile, express delivery service, or registered or certified mail, if to the
Company or to the Executive, at 1111 S. 103rd St.,
Omaha, Nebraska 68124, fax number (402) 231-1658 or to such other address as may
be subsequently designated by the Company or the Executive in writing to the
other party.

    

    (e)          A
waiver by a party of a breach of this Agreement will not constitute a waiver of
any other breach, prior or subsequent, of this Agreement.

    

    

    IN
WITNESS WHEREOF, the Company and the Executive have entered into this Agreement
as of February 25, 2008.

    

     

    
      
        	 	MIDAMERICAN
      ENERGY HOLDINGS COMPANY	 
	 	 	 	 
	
                 

              	
                By:
      

              	/s/ 
      Douglas L. Anderson	 
	 	 	 Douglas
      L. Anderson	 
	 	 	 Senior
      Vice President and General Counsel	 
	 	 	 	 

      

    

    

      
        	 	EXECUTIVE:	 
	 	 	 	 
	
                 

              	
                By:
      

              	/s/ 
      David L. Sokol	 
	 	 	 David
      L. Sokol	 
	 	 	 	 
	 	 	 	 

      

    

     

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
A

    

    

    Defined
Terms

    

    “Affiliate
means, with respect to a Person, (a) any Person directly or indirectly owning,
controlling, or holding power to vote 10% or more of the outstanding voting
securities of the Person; (b) any Person 10% or more of whose outstanding voting
securities are directly or indirectly owned, controlled or held with power to
vote by the Person; (c) any Person directly or indirectly controlling,
controlled by or under common control with, the Person and (d) any officer or
director of the Person, or of any Person directly or indirectly controlling the
Person, controlled by the Person or under common control with the Person. As
used in this definition, “control” means the possession, directly or indirectly,
of the power to direct or cause the direction of the management and policies of
a Person.

    

    “Agreement”
means this Employment Agreement dated as of August 21, 1995, by and between the
Company and the Executive, as it may be amended from time to time in accordance
with its terms.

    

    “Board”
means the Board of Directors of the Company or, if the context is appropriate,
any duly authorized and appointed committee or member of the Board of Directors
having authority to act on behalf of the Board of Directors with respect to the
matter in question.

    

    “Cause
means any or all of the following:

    

    
      	
               
      

            	
              (a)

            	
              the
      willful and continued failure by the Executive to perform substantially
      the services contemplated by the Agreement (other than any such failure
      resulting from the Executive’s incapacity due to disability) after a
      written demand for substantial performance is delivered to the Executive
      by a member or representative of the Board which specifically identifies
      the manner in which it is alleged that the Executive has not substantially
      performed such services;

            

    

    

    
      	
               
      

            	
              (b)

            	
              the
      willful engaging by the Executive in gross misconduct which is materially
      and demonstrably injurious to the Company, provided that, no act, or
      failure to act, on the Executive’s part shall be considered “willful”
      unless done, or omitted to be done, in bad faith and without reasonable
      belief that such action or omission was in, or not opposed to, the best
      interests of the Company; or

            

    

    

    
      	
               
      

            	
              (c)

            	
              the
      gross negligence of the Executive in performing the services contemplated
      by the Agreement which is materially and demonstrably injurious to the
      Company.

            

    

    

    “Cause”
will exist only if the Board has delivered to the Executive a copy of a
resolution duly adopted by the affirmative vote of a majority of the entire
membership of the Board at a meeting of the Board called and held for that
purpose (after reasonable notice to the Executive and an opportunity for the
Executive, together with his counsel, to be heard before the Board), finding
that, in the good faith judgment of the Board, the Executive was guilty of the
conduct constituting such Cause and specifying, the particulars thereof in
detail.

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    

    “Company”
means MidAmerican Energy Holdings Company, an Iowa corporation, and any
successor or assign permitted under the Agreement.

    

    “Consent
of the Board” means, with respect to an action, the consent of the Board to the
action given prior to the action in a resolution duly adopted by the Board,
appropriate committee of the Board, or by a member of the Board duly authorized
to consent to such action.

    

    “Disability”
means, with respect to the Executive,  a condition of any medically
determinable physical or mental impairment which can be expected to result in
death or can be expected to last for a continuous period of not less than 12
months and the Executive (i) is unable to engage in any substantial gainful
activity or (ii) has been receiving income replacement benefits for a period of
not less than 3 months under a group long term disability insurance policy
covering employees of the Company.

    

    “Minimum
Bonus” means, with respect to a fiscal year, $750,000; provided, however, 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) of this Agreement, there shall be no Minimum Bonus, but the Board
shall retain its discretion to award Annual Bonus Compensation pursuant to
Section 4(c) of the Agreement.

    

    “Permanent
Disability” means a Disability which has continued for at least six consecutive
calendar months.

    

    “Person”
means any natural person, general partnership, limited partnership, corporation,
joint venture, trust, business trust, or other entity.

    

    “Term of
Employment” means the period of time beginning on August 21, 1995, and ending on
the fifth anniversary of such date, unless earlier terminated pursuant to
Section 7(a) or automatically extended pursuant to the following sentence. The
Term of Employment will be automatically extended for one year on each August 21
beginning on August 21, 2000, unless the Executive has given the Company a
notice declining automatic extension at least 120 calendar days before the
anniversary; provided, however, 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) of this Agreement, the Term of
Employment shall mean the period of time beginning on the date the Executive
relinquishes his position as Chief Executive Officer of the Company and ending
on the fifth anniversary of such date, unless earlier terminated pursuant to
Section 7(a).

    

    “Termination
Date” means the date of termination of employment of the Executive pursuant to
Section 7 of this Agreement.

    

    
      
        
           

        

        
          13 

          
            

          

        

        
           

        

      

    

    

    

    EXHIBIT
B

    

    David L.
Sokol

    

    Credited
Years of Service as of March 12, 1999: 6 years, 9 months

    

    

    

    
      
        
           

        

        
            14

          
            

          

        

        
           

        

      

    

    

    

    EXHIBIT
C

    

    (Revised
January 27, 2000)

    

    

    David L.
Sokol

    

    Minimum
Annual SERP benefit payment for retirement or disability payback on attaining
age 47:  $1,000,000.

    

    

    

    
15exh10-3.htm

     

     

    
      

      

    

    EXHIBIT
10.3

    

    EXECUTION
COPY

    

    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 6,
1996, as amended, and as restated as of May 10, 1999, and is by and between
MidAmerican Energy Holdings Company (formerly CalEnergy Company, Inc.
(“CalEnergy”), an Iowa corporation (the “Company”), and Gregory E. Abel (the
“Executive”).

    

    RECITALS

    

    The
Company desires to employ the Executive as its President and Chief Operating
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
President and Chief Operating Officer of the Company, subject to and upon the
terms set forth in this Agreement, for the Term of Employment.

    

    (b)  The
Executive’s primary place of employment will be Des Moines, Iowa.

    

    Section
3.  Duties.

    

    (a)  The
Executive (i) will perform and discharge the duties incident to and consistent
with his title of President and Chief Operating Officer, and (ii) will perform
and discharge such other duties, and will have such other authority, as are
delegated to him by the Chairman of the Board of the Company (hereinafter
referred to as the “Chairman of the Board”).  In performing such
duties, the Executive will report directly to, and be subject to the direction
of, the Chairman of the Board.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (b)  The
Executive will act, without any compensation in addition to the compensation
payable pursuant to this Agreement, as an officer or member of the board of
directors of any subsidiary of the Company, if so appointed or
elected.

    

            (c)  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 its
subsidiaries and (ii) will not, without the written consent of the Chairman of
the Board, perform any services for any other Person or engage in any other
business or professional activity, whether or not performed or engaged in for
profit.

    

    (d)  Notwithstanding
subsection 3 (c), the Executive, without the consent of the Chairman of the
Board, may (i) purchase securities issued by, or otherwise passively invest his
personal or family assets in, any other company or business within the
constraints imposed by the Company’s Code of Business Conduct and Berkshire
Hathaway’s Code of Business Conduct, referred to below, and (ii) 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
Chairman of the Board or any duties under this Agreement, and (B) do not
interfere with the devotion by the Executive of his entire 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 an
annual rate of $350,000, in substantially equal periodic payments in accordance
with the Company’s practices for executive employees, as determined from time to
time by the Compensation Committee.

    

    (b)  The
Chairman of the Board will review the salary payable to the Executive at least
annually beginning in the fourth fiscal quarter of 2008.  The
Compensation Committee, 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 4 (a) above.

    

     (c)  During
the Term of Employment, the Executive shall be eligible for consideration for an
annual incentive merit bonus for the Executive’s performance during the fiscal
year of the Company in an amount determined by the Compensation Committee, in
its discretion, by reference to the accomplishment by the Executive of goals
established by the Chairman of 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 Chairman of the Board. The Executive’s annual
incentive merit 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.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    (d)  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.

    

    (e)  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.

    

    (f) Any
base salary payable to the Executive for any period of employment of less than
one 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 Sections
8(b) and 8(c).

    

         Section 5.  Other
Benefits.

    

    (a)  During
the Term of Employment, the Executive and his dependents 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 dependents otherwise satisfies the
standards established for participation in the plan. The terms of Executive’s
existing option agreements, as amended, remain unaffected hereby, except as set
forth in Sections 8(b) and 8(c) hereof.

    

    (b)  The
Executive may take up to four weeks of vacation during each full calendar year
during the Term of Employment at a time mutually convenient to the Executive and
the Company, without loss of compensation or other benefits under this
Agreement.

    

    Section 5
A.  Supplemental Retirement
Benefits.

    

    (a)  Effective
as of March 12, 1999, the closing date of the merger between CalEnergy Company,
Inc. 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 CalEnergy Company, Inc. prior to the
Merger Date, and for certain additional years of service (or portions thereof)
as provided on Exhibit B attached hereto.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    (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 the date of the Triggering Event, and

    

    (ii) any
benefits under the SERP not fully vested on January 27, 2000 became fully vested
as of such date.

    

    (e)  Notwithstanding
anything herein or in the SERP to the contrary, for purposes of determining any
benefit payable to Executive under the SERP, Executive’s annual base salary and
annual bonus shall never be less than the base salary referenced in Section 4(a)
hereof and that portion of the Annual Bonus Compensation earned by Executive for
the 1998 calendar year which the SERP committee has determined shall be included
for purposes of calculating the SERP benefit (i.e., $500,000).

    

    (f)  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.

    

    (g)  A
general release of claims under the SERP shall not be required of the Executive
in order to receive benefits thereunder.

    

    (h)  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.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    Section
6.  Confidentiality and Post-Employment Restrictions.

    

    (a)  The
Executive acknowledges that the Company and its Affiliates have confidential
information and trade secrets, whether written or unwritten, with respect to
carrying on their business, including sensitive marketing, bidding,
technological and engineering information and data, names of past, present and
prospective customers or partners of and vendors or suppliers to the company and
its Affiliates, working relationships with governmental agencies and officials,
methods of pricing contracts and income and expenses associated therewith, the
international business strategy and relative ranking of opportunities in various
countries, negotiated prices and offers outstanding, credit terms and status of
accounts and the terms of circumstances of any current or prospective business
arrangements between the Company and its Affiliates 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 its
Affiliates, or (iii) information known to the Executive prior to any disclosure
to him by the Company or its Affiliates. The Executive further acknowledges that
the Executive possesses a high degree of knowledge of the independent energy
industry and, in particular, has committed to a long-standing relationship with
the Company and its Affiliates as an employee 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 independent 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 (i) a breach of this Agreement by the Company, or (ii)
for Good Reason, 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 2% of
the outstanding equity or partnership interest) any person, firm, corporation,
partnership, joint venture or business which is primarily engaged in the
production or marketing of steam or electrical energy or which otherwise
directly competes with the business of the Company or its controlled Affiliates
and, further, the Executive agrees that, to avoid the risk of disclosing or
improperly using Confidential Information or Trade Secrets, he shall not
directly or indirectly, provide consulting or advisory services to any of such
independent energy businesses.  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 written consent of the Chairman of the Board, the Executive will not, during
and for three 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, its Affiliates or duly authorized agents, attorneys or other
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 and its Affiliates.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    (c)  For
a period of three years after the Term of Employment, the Executive shall
neither directly nor indirectly solicit, on behalf of another employer, the
employment of, or hire or cause another employer to hire, any person who is then
currently employed by the company or an Affiliate thereof, or otherwise induce,
on behalf of another employer, such person to leave the employment of the
Company or an Affiliate thereof without the prior written approval of the
Chairman of the Board.

    

    (d)  The
Executive will hold, on behalf of the Company and its Affiliates and as the
property of the Company and its Affiliates, all memoranda, manuals, books,
papers, letters, documents, computer discs, data and software and other similar
property obtained during the course of his employment by the Company or its
Affiliates and relating to the Company’s or its Affiliates business, and will
return such property to the Company or its Affiliates at any time upon demand by
the Chairman of the Board and, in any event, within five calendar days after the
end of the Term of Employment.

    

    (e)  During
the Term of Employment, Executive agrees to comply in all material respects with
the Company’s Code of Business Conduct as in effect on the date hereof.
Executive also agrees to comply in all material respects with Berkshire
Hathaway’s Code of Business Conduct as is then in effect.

    

    (f)  If
any of the provisions of, or covenants contained in, this Section 6 are
hereafter construed to be invalid or unenforceable in any jurisdiction, the same
shall not affect the remainder of the provisions or the enforceability thereof
in any other jurisdiction, which shall be given full effect, without regard to
the invalidity or unenforceability in such other jurisdiction. If any of the
provisions of, or covenants contained in, this Section 6 are held to be
unenforceable in any jurisdiction because of the duration or geographical scope
thereof, the parties agree that the court making such determination shall have
the power to reduce the duration or geographical scope of such provision or
covenant and in its reduced form, such provision or covenant shall be
enforceable; provided, however, that the
determination of such court shall not affect the enforceability of this Section
6 in any other jurisdiction.

    

    Section
7.  Termination of
Employment.

    

    (a)  The
employment of the Executive under this Agreement will terminate on the earliest
of: (i) written notice by the Executive of his resignation other than for Good
Reason; (ii) the day the Company gives to the Executive written notice of
termination without Cause; (iii) the day the Company gives to the Executive
written notice of termination for Cause; (iv) the Permanent Disability of the
Executive; (v) the death of the Executive; or (vi) written notice by the
Executive of his resignation for Good Reason.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

     

    (b)  If
the employment of the Executive is terminated under this Agreement for any
reason whatsoever, the obligations of the Executive under Section 6 will remain
in full force and effect to the extent provided therein, 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 Section
8.

    

    Section
8.  Payment
Upon Termination.

    

    (a) If
the employment of the Executive is terminated pursuant to subsections (i) or
(iii) of Section 7(a), the Company will pay to the Executive, within 30 calendar
days, any base salary and reimbursable expenses pursuant to Section 4(a) and
Section 4(d) which are accrued but unpaid through the Termination
Date.

    

    (b)  If
the employment of the Executive is terminated pursuant to subsections (ii),
(iv), (v) or (vi) of Section 7(a), the Company will pay the Executive, subject
to the Executive’s compliance in all material respects with his post-termination
obligations under Section 6, (i) within 30 calendar days, any base salary and
reimbursable expenses which are accrued and unpaid through such date, (ii) a
single lump sum equal to twice his annual base salary then in effect pursuant to
Section 4 and (iii) a single lump sum equal to two times the greater of (x) the
Minimum Bonus or (y) the average Annual Bonus Compensation payable to the
Executive in respect of the two fiscal years immediately preceding the year in
which  the Executive’s employment with the Company terminates (with
any such year for which no bonus was payable included in such two year average
as a zero).  In addition, in the event of any such termination,
subject to the Executive’s compliance in all material respects with his
post-termination obligations under Section 6, the Company agrees that (x) the
Company stock options previously granted to Executive will continue to vest
according to their terms within such next 24 months (beginning with the month
following the month in which the Termination Date occurs, after which time the
unvested remainder will lapse) and such vested options may be exercised within
the remaining term of such options as provided in the respective option
agreements, and (y) the Company shall continue in effect for Executive, for a
period of 24 months after the date of any such termination, the life insurance
benefits; medical benefits and dental benefits, the tax preparation and
investment advisory services and any other employee benefits made generally
available to senior executives of the Company on and after the date hereof
through the end of the 24-month post-termination period (except for disability
plan benefits), subject to such employee contributions and other terms and
conditions as are applicable to active employees generally and subject to
subsequent modification or termination of such plans to the extent such
subsequent actions are also applicable to active employees generally; provided
that such plan benefits shall terminate earlier on the date, if any, that
comparable benefits are made available to the executive by any new employer. To
the degree that any of the above employee benefit programs are not available to
Executive on account of his status as a non-employee after termination of
employment, the Company shall provide for economically equivalent programs
during the 24-month period or pay to Executive a lump sum cash amount designed
to allow him to obtain economically equivalent benefits or put him in the same
economic position on an after tax basis. If it is determined that benefits paid
with respect to the extension of medical and dental benefits to Executive would
not be exempt from taxation under the Internal Revenue Code, Company shall pay
to Executive a lump sum cash payment within 2 1⁄2 months following separation from
service to allow him to obtain equivalent medical and dental benefits and which
would put him in the same after-tax economic position.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    (c)   Reserved.

    

    (d)  If
the employment of the Executive is terminated pursuant to subsections (ii),
(iv), (v) or (vi) of Section 7(a), all Performance Accelerated Stock Options
(“PASOs”) held by the Executive on the Termination Date will become vested and
immediately exercisable on such Termination Date and shall otherwise remain
exercisable for their term in accordance with the terms there of.

    

    (e)  If
the employment of the Executive is terminated for any reason, then without
further action by the Company, the Board or any committee thereof, the Executive
may exercise any vested stock options (including vested PASOs) held by the
Executive pursuant to existing procedures approved by the Compensation Committee
for cashless exercise, by surrendering previously owned shares, electing to have
the Company withhold shares otherwise deliverable upon exercise of such options,
or by providing an irrevocable direction to a broker to sell shares and deliver
all or a portion of the proceeds to the Company, in any case in an amount equal
to the aggregate exercise price and any tax withholding obligation attendant to
the exercise.

    

    Section
8A.  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, distribution, waiver of Company rights,
acceleration of vesting of any stock options or restricted stock, or any other
payment or benefit in the nature of compensation to or for the benefit of the
Executive, along or in combination (whether such payment, distribution, waiver,
acceleration or other benefit is made pursuant to the terms of this Agreement or
any other agreement, plan or arrangement providing payments or benefits in the
nature of compensation to or for the benefit of the Executive, but determined
without regard to any additional payments  required under this Section
8A) (a “Payment”) would be subject to the excise tax imposed by Section 4999 of
the Code (or any successor provision) 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 payment (a “Gross-Up
Payment”) in an amount such that after payment by the Executive of all taxes
with respect to the Gross-Up Payment (including any interest or 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. Any Gross-Up
Payment made by the Company to the Executive with respect to any Excise Tax paid
by the Executive shall be made by the Company as soon as administratively
feasible after the determination of such Excise Tax, but in no case later than
by the end of the calendar year following the calendar year in which the
Executive makes the Excise Tax payment.

     

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    (b)  Subject
to the provisions of Section 8A(c), all determinations required to be made under
this Section 8A, 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 Deloitte and Touche LLP, or
such other nationally recognized accounting firm then auditing the accounts of
the Company (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 unwilling or unable to perform its obligations pursuant to this Section
8A, the Executive shall appoint another nationally recognized accounting firm to
make the determinations required hereunder (which accounting firm shall then be
referred to hereunder as the Accounting Firm). All fees and expenses of the
Accounting Firm shall be borne solely by the Company. Any Gross-Up Payment,
determined pursuant to this Section 8A, shall be paid by the Company to the
Executive within five days of the receipt of the Accounting Firm’s
determination. Any determination by the Accounting Firm shall be binding upon
the Company and the Executive. The parties hereto acknowledge that, as a result
of the potential uncertainty in the application of Section 4999 of the Code (or
any successor provision) at the time of the initial determination by the
Accounting Firm hereunder, it is possible that the Company will not have made
Gross-Up Payments which should have been made consistent with the calculations
required to be made hereunder (an “Underpayment”). In the event that the Company
exhausts its remedies pursuant to Section 8A(c) 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 20 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 he 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 such period
that it desires to contest such claim, the Executive Shall:

    

    (i) give
the Company any information reasonably requested by the Company relating to such
claim,

    

    (ii) take
such action in connection with contesting 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,

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    (iii)
cooperate with the Company in good faith in order to effectively 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 penalties) 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 limiting the foregoing provisions of this Section 8A(c),
the Company shall control all proceedings taken in connection with such contest
and, at its sole option, may pursue or forgo 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 contest the claim in any permissible manner,
and the Executive agrees to prosecute such contest to a determination before any
administrative tribunal, in a court of initial jurisdiction and in one or more
appellate courts, as the Company shall determine; provided, however, that any
extension of the statute of limitations relating to payment of taxes for the
taxable year of the Executive with respect to which such contested amount is
claimed to be due is limited solely to such contested amount. Furthermore, the
Company’s control of the contest shall be limited to issues with respect to
which a Gross-Up Payment would be payable 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.

    

    Section
8B.  Restrictions on Payment to
“Specified Employees” under Section 409A of the Internal Revenue
Code.   In the event any payment to be made under this
Employment Agreement is subject to the provisions of Section 409A of the
Internal Revenue Code (and is not otherwise exempt under applicable guidance
issued under Section 409A), if such payment is due to the separation from
service of the Executive (other than because of death), and if the Executive is
a "specified employee" (as defined in Section 409A of the Internal Revenue Code)
at the time of separation from service, such payment shall not be made until the
date that is 6 months following the date of separation from
service.  In the event of any such delay in payment, interest shall be
added to the delayed payment utilizing the interest rate on 1-year constant
maturity U.S. Treasury Notes as published by the Federal Reserve Board (or its
successor) in Statistical Release H.15 (or its successor) corresponding to the
date that payment would have been made if the delay hereunder had not
occurred.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    Section
9. Remedies.

    

    (a)  The
Company will be entitled, if it elects to enjoin any breach or threatened breach
of, or enforce the specific performance of, the obligations of the Executive
under Section 3 or 6, without showing any actual damage or that monetary damages
would be inadequate. Any such equitable remedy will not be the sole and
exclusive remedy for any such breach, and the Company may pursue other remedies
for such a breach.

    

    (b)  Any
court proceeding to enforce this Agreement may be commenced in federal courts,
or in the absence of federal jurisdiction the state courts, located in Omaha,
Nebraska. The parties submit to the jurisdiction of such courts and waive any
objection which they may have to pursuit of any such proceeding in any such
court.

    

    (c)  Except
to the extent that the Company elects to seek injunctive relief in accordance
with subsection 9 (a), any controversy or claim arising out of or relating to
this Agreement or the validity, interpretation, enforceability or breach of this
Agreement will be submitted to arbitration in Omaha, Nebraska, in Accordance
with the then existing rules of the American Arbitration Association, and
judgment upon the award rendered in any such arbitration may be entered in any
court having jurisdiction.

    

    Section
10.  Assignment.  Neither
the Company nor the Executive may sell, transfer or otherwise assign their
rights, or delegate their obligations, under this Agreement, provided that the
Company shall require any successor to all or substantially all of the business,
stock or assets of the Company to expressly assume the Company’s rights and
obligations hereunder.

    

    Section
11.  Unfunded
Benefits.  All compensation and other benefits payable to the
executive under this Agreement will be unfunded, and neither the Company nor any
Affiliate of the Company will segregate any assets to satisfy any obligation of
the Company under this Agreement. The obligations of the Company to the
Executive are not the subject of any guarantee or other assurance of any Person
other than the Company.

    

    Section
12.  Severability.  Should
any provision, paragraph, clause or portion thereof of this Agreement be
declared or be determined by any court or arbitrator of competent jurisdiction
to be illegal, unenforceable or invalid, the validity or enforceability of the
remaining parts, terms or provisions shall not be affected thereby and said
illegal or invalid part, term or provision shall be deemed not to be a part of
this Agreement. Alternatively, the court or arbitrator having jurisdiction shall
have the power to modify such illegal, unenforceable or invalid provision so
that it will be valid and enforceable, and, in any case the remaining provisions
of this Agreement shall remain in full force and effect.

    

    Section
13.  Miscellaneous.

    

    (a)  This
Agreement may be amended or modified only by a writing executed by the Executive
and the Company.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    (b)  This
Agreement will be governed by and construed in accordance with the internal laws
of the State of Nebraska.

    

    (c)  This
Agreement constitutes the entire agreement of the Company and the Executive with
respect to the matters set forth in this Agreement and supersedes any and all
other agreements between the Company and the Executive relating to those
matters.

    

    (d)  Any
notice required to be given pursuant to this Agreement will be deemed given (i)
when delivered in person or by courier or (ii) on the third calendar day after
it is sent by facsimile, with written confirmation of receipt, if to the
Company, to: Chairman of the Board, MidAmerican Energy Holdings Company at 1111
S. 103rd St.,Omaha, Nebraska 68124, fax number (402) 231-1658, and if to the
Executive, at 666 Grand Avenue, Des Moines, Iowa 50309, fax number (515)
242-4031 or to such other address as may be subsequently designated by the
Company or the Executive in writing to the other party.

    

    (e)  A
waiver by a party of a breach of this Agreement will not constitute a waiver of
any other breach, prior or subsequent, of this Agreement.

    

    IN
WITNESS WHEREOF, the Company and the Executive have entered into this Agreement
as of February 25, 2008.

     

     

    
      
        	 	MIDAMERICAN
      ENERGY HOLDINGS COMPANY	 
	 	 	 	 
	
                 

              	
                By:
      

              	/s/ 
      Douglas L. Anderson	 
	 	 	Douglas
      L. Anderson	 
	 	 	Senior
      Vice President and General Counsel	 
	 	 	 	 

      

    

     

    
      
        	 	EXECUTIVE:	 
	 	 	 	 
	
                 

              	
                By:
      

              	/s/ 
      Gregory E. Abel	 
	 	 	Gregory
      E. Abel	 
	 	 	 	 
	 	 	 	 

      

    
      
        
           

        

        
          12 

          
            

          

        

        
           

        

      

    

     

    EXHIBIT
A

    

    Defined
Terms

    

    

    “Affiliate”
means, with respect to a Person, (a) any Person directly or indirectly owning,
controlling, or holding power to vote 10% or more of the outstanding voting
securities of the Person; (b) any Person 10% or more of whose outstanding voting
securities are directly or indirectly owned, controlled or held with power to
vote by the Person; (c) any Person directly or indirectly controlling,
controlled by or under common control with, the Person; and (d) any officer or
director of the Person, or of any Person directly or indirectly controlling the
Person, controlled by the Person or under common control with the Person. As
used in this definition, “control” means possession, directly or indirectly, of
the power to direct or cause the direction of the management and policies of a
Person.

     

    “Agreement”
means this Employment Agreement dated as of August 6, 1996, by and between the
Company and the Executive, as it may be amended from time to time in accordance
with its terms.

    

    “Board”
means the Board of Directors of the Company.

    

    “Cause”
means any or all of the following:

    

    
      	
              (a)

            	
              the
      willful and continued failure by the Executive to perform substantially
      the services and duties contemplated by this Agreement (other than any
      such failure resulting from the Executive’s incapacity due to
      disability);

            

    

    

    
      	
              (b)

            	
              the
      willful engaging by the Executive in gross misconduct which is injurious
      to the business or reputation of the Company in any material
      respect;

            

    

    

    
      	
              (c)

            	
              the
      gross negligence of the Executive in performing the services contemplated
      by this Agreement which is injurious to the business or reputation of the
      Company in any material respect; or

            

    

    

    
      	
              (d)

            	
              Executive’s
      conviction of, or pleading guilty or no contest to, a felony involving
      moral turpitude.

            

    

    

    “Code”
means the Internal Revenue Code of 1986, as amended.

    

    “Company”
means MidAmerican Energy Holdings Company, an Iowa corporation, and any
successor or assign permitted under the Agreement.

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

     “Disability”
means, with respect to the Executive, a condition of any medically determinable
physical or mental impairment which can be expected to result in death or can be
expected to last for a continuous period of not less than 12 months and the
Executive (i) is unable to engage in any substantial gainful activity or (ii)
has been receiving income replacement benefits for a period of not less than 3
months under a group long term disability insurance policy covering employees of
the Company.

    

    “Good
Reason” means any of the following events:  (i) 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) of this
Agreement; (ii) any reduction by the Company of the title, office, duties or
authority of the Executive in any material respect; or (iii) any relocation of
the Executive’s primary place of employment to a location more than 25 miles
from Des Moines, Iowa.

    

    “Minimum
Bonus” means, with respect to a fiscal year, $200,000.

    

    “Permanent
Disability” means a Disability which has continued for at least six consecutive
calendar months.

    

    “Person”
means any natural person, general partnership, limited partnership, corporation,
joint venture, trust, business trust, or other entity.

    

    “Term of
Employment” means the period of time beginning on August 6, 1996, and ending on
the eighth anniversary of such date, unless earlier terminated pursuant to
Section 7(a) or automatically extended pursuant to the following sentence. The
Term of Employment will be automatically extended for one year on each
anniversary of the date of this Agreement beginning on the fifth anniversary
unless the Executive has given the Company, or the Company has given the
Executive, a notice declining automatic extension at least 365 calendar days
before the anniversary.

    

     “Termination
Date” means the date of termination of employment of the Executive pursuant to
Section 7 of this Agreement.

    

    
      
        
           

        

        
          14 

          
            

          

        

        
           

        

      

    

    

    EXHIBIT
B

    

    Gregory
E. Abel

    

    Credited
Years of Service as of March 12, 1999:  11 years, 1
month.

    

    
      
        
           

        

        
          15 

          
            

          

        

        
           

        

      

    

    

    EXHIBIT
C

    

    Gregory
E. Abel

    

    Minimum
Annual SERP benefit payment for retirement or disability payable on or after
attaining age 47:  $693,333.

    

    

    

    
16

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