EXHIBIT NO. 10b(16)
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is made and entered into as of
September 1, 1992, by and between Carolina Power & Light Company ("Employer")
and Xxxxxxx Xxxxxxxxx, III ("Employee").
WHEREAS, Employer desires to retain Employee and Employee desires to be
retained by Employer as President and Chief Operating Officer of Employer, on
the terms and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual agreements contained
herein, the parties agree as follows:
SECTION 1 - EMPLOYMENT
Employee shall be employed as President and Chief Operating Officer by
Employer, shall devote his full business time and best efforts to the
performance of the duties that are necessary and appropriate as such. Employee
will also perform all duties and obligations as the Chief Executive Officer of
the Company and the Board of Directors may from time to time specifically
require, including without limitation, those duties and obligations in this
Agreement. Employee shall be responsible and report directly to the Chief
Executive Officer of the Company. Employee agrees to such employment upon the
terms and conditions in this Agreement.
SECTION 2 - TERM OF EMPLOYMENT
This employment is similar to the employment of other senior executives
of Employer and is at the continued will of both parties. If it should be
terminated by either party, then the provisions of Section 7 herein shall apply.
SECTION 3 - COMPENSATION
In consideration of all the services to be rendered by Employee to
Employer under this Agreement, Employer shall compensate Employee as follows:
(a) Employee shall be paid an aggregate annual salary, exclusive of
fringe benefits and benefits provided under employee benefit plans, of $400,000,
payable at such intervals, but not less frequently than monthly, as Employer may
determine. Such salary shall be subject to periodic review and adjustment by
Employer commencing in calendar year 1993 and thereafter, at the same time and
in the same manner as other executive officer salaries are reviewed and adjusted
by Employer;
(b) Employee shall receive 2,000 shares of Employer common stock, plus
such additional amounts as are necessary to pay the amount of federal, state and
local taxes due on the value of such stock;
(c) Employee shall receive short-term incentive compensation payments
of: (i) $150,000, to be paid on or before March 15, 1993 with respect to
Employee's services in calendar year 1992; and (ii) $150,000, to be paid on or
before March 15, 1994 with respect to Employee's services in calendar year 1993.
Such cash payments shall be in lieu of amounts that might otherwise be payable
to Employee with respect to calendar years 1992 and 1993 under Employer's
Management Incentive Compensation Program or any similar program adopted in lieu
thereof. With respect to calendar years after 1993, Employee shall be eligible
to participate in Employer's Management Incentive Compensation Program or any
similar program adopted in lieu thereof and Employee's entitlement to any such
short-term incentive compensation shall be determined under such program;
(d) Employee shall be entitled to such long-term incentive compensation
payments or awards under plans or programs adopted from time to time by the
Board of Directors of the Employer which covers eligible executive officers,
including Employee;
(e) Employee shall be eligible to participate in certain employee
pension benefit programs (including certain deferred compensation plans or
agreements) as described in Section 4 of this Agreement;
(f) Employee shall be eligible to participate in certain employee
welfare benefit plans or programs and shall be entitled to certain fringe
benefits as described in Section 5 of this Agreement. Such fringe benefits shall
be taxable to the extent required by law, and Employee shall not receive any
additional amounts to pay the taxes due on any taxable fringe benefits except as
otherwise provided in Section 5.
SECTION 4 - PENSION AND DEFERRED COMPENSATION BENEFITS
(a) Employee shall be entitled to participate in and be eligible for
such pension and deferred compensation benefit plans or programs available
generally to senior executives of Employer, including by way of illustration,
but not by way of limitation, the Stock Purchase-Savings Plan, the Supplemental
Retirement Plan for Employees, the Supplemental Executive Retirement Plan
("SERP"), the Executive Deferred Compensation Plan, and the Deferred
Compensation Plan for Key Management Employees. Employee shall be entitled to
participate in such plans and programs on the same terms and conditions as other
executive employees, except as follows:
(i) Employee shall be entitled to a payment of $150,000 which
shall be deferred and paid to Employee as if it were deferred under the Deferred
Compensation Plan for Key Management Employees as a one-year deferral for
calendar year 1992. This amount shall be utilized to provide retirement income
to Employee of $121,368 per year for 15 years, payable monthly, commencing upon
Employee's attainment of age 65. In addition, reduced payments shall be made
pursuant to an agreed-upon schedule if Employee dies before reaching age 65.
(ii) With respect to the SERP, Employee shall become
immediately eligible to participate and shall be fully vested in benefits
thereunder as of his date of employment. As of his date of employment, Employee
shall also be credited with 14 years of service and an average annual
compensation for the three (3) years ending September 1, 1992 of $400,000 for
purposes of determining his benefits thereunder.
SECTION 5 - WELFARE AND FRINGE BENEFITS
(a) Employee shall be entitled to participate in all such welfare
benefit programs and plans that exist or may hereafter be instituted by
Employer, and shall receive all other fringe benefits available generally to
senior executives of Employer. These welfare benefit plans and programs and
other fringe benefits include, by way of illustration, but not by way of
limitation, group health insurance benefits, life insurance benefits, long-term
and short-term disability benefits, vacation days, and annual Employer holidays.
(b) Employee shall be entitled to receive the following additional
welfare benefits and fringe benefits on the same terms and conditions as other
executive employees, except as follows:
(i) Employee shall be provided with split-dollar life
insurance coverage in an amount equal to $1,200,000. The cost of such coverage
shall be included in Employee's taxable income in accordance with applicable
regulations. This split-dollar life insurance coverage shall be in addition to
$50,000 in group-term life insurance provided to all senior executives with
split-dollar life insurance coverage and shall be in lieu of any other insurance
coverage available to Company employees under the Company's group-term life
insurance program.
(ii) Employee shall be provided with split-dollar life
insurance coverage in the amount of $3,000,000, insuring the joint lives of
Employee and his spouse, with the Employee's portion of such premium to be paid
by Employee or the trustee of an irrevocable life insurance trust established by
the Employee if the trust is the owner of the policy;
(iii) Employee shall have the opportunity to obtain estate
planning counseling provided through the trust department of Wachovia Bank of
North Carolina, N.A.;
(iv) Employee shall be entitled to four (4) weeks of annual
vacation and additional vacation days as approved on a discretionary basis by
the Chief Executive Officer of the Company;
(v) Employer shall pay initiation fees and dues for the
Employee at the Capital City Club. At the option of Employee, Employer also will
pay the initiation fee to the country club of Employee's choosing. All monthly
country club dues will be paid by Employee;
(vi) Employee shall be entitled to membership in the Xxx
Hospital Wellness Center, with the initiation fee and monthly dues to be paid by
Employer;
(vii) Employer shall pay for one annual physical, to be
provided by a physician of Employee's choice;
(viii) Employer will provide Employee with a home security
system which shall include a central burglar alarm system;
(ix) Employee shall be provided an automobile of the class
available to senior executives of Employer, with a cellular telephone. Insurance
and maintenance for the vehicle will be provided by Employer, and all base
monthly telephone charges and the incremental charges for all business calls on
the cellular telephone will be paid by Employer;
(x) Employee shall be entitled to utilize chartered aircraft
service pursuant to the Employer's policies as needed, and, pursuant to
Employee's discretion, first class commercial air travel;
(xi) Employee shall be provided with a personal computer at
his home for business use;
(xii) Employee shall be reimbursed for relocation expenses as
described in Attachment A hereto; and
(xiii) Upon retirement from employment with the Employer,
Employee shall be entitled to the same medical and dental coverage provided
other future retirees of the Employer, such as the Chairman/Chief Executive
Officer; provided, however, that to the extent that any such benefits may not be
provided to Employee due to statutory or regulatory limitations, Employer shall
obtain substantially equivalent coverage on an insured basis.
SECTION 6 - REIMBURSEMENT OF BUSINESS EXPENSES
Employer shall reimburse Employee for all reasonable business
expenditures incurred by Employee in the ordinary and necessary performance of
his duties hereunder in accordance with reasonable practices established from
time to time by Employer, upon timely presentation by Employee of an itemized
account of such expenditures. In addition, Employee shall be entitled to
reimbursement for travel expenses of Employee's spouse when she accompanies him
to business meetings when spousal attendance is customary.
SECTION 7 - TERMINATION
(a) Employee's employment may be terminated at any time by either
Employee for Employer and for any reason. No advance notice of such termination
shall be required to be provided by either party. Upon termination of Employee's
employment, Employee shall be entitled to such benefits under Employer's
established benefit programs as determined under such programs and this Section
7 of this Agreement.
(b) If Employee's employment is terminated, or constructively
terminated, by the Employer for any reason other than good cause, then to the
extent vested, Employee will retain all benefit rights under all established
benefit programs as well as all benefits described herein. Employee shall also
be entitled to salary continuation of his full base monthly salary for 24 months
following such termination. During such 24-month period, Employee shall be
entitled to continued coverage under the medical, dental, life insurance, and
disability programs, provided, however, that to the extent any such employee
benefits may not be provided to Employee due to statutory or regulatory
nondiscrimination rules, Employer shall obtain for Employee substantially
equivalent coverage on an insured basis. The cost of any such medical, dental,
life insurance, or disability coverage shall be included in Employee's taxable
income, if required by and in accordance with applicable regulations.
(c) At the option of the Employee, to be exercised within one year of
the occurrence of the event, Employee may deem any of the following events to be
a constructive termination of Employee's employment by Employer:
(i) Change in form of ownership of Employer (e.g., Employer is
acquired, enters into a business combination with another company or otherwise
changes form of ownership).
(ii) Change in the present Chairman of the Board/Chief
Executive Officer of the Employer or a material change in his responsibilities.
(d) If Employee's employment is terminated by Employee for any reason
other than death or disability, Employee shall retain all vested benefits,
calculated as of the date of termination, but shall not be entitled to any form
of salary or benefit continuance.
SECTION 8 - COOPERATION AFTER TERMINATION
Following any termination of employment by Employee, Employee shall
fully cooperate with Employer in all matters relating to the completion of
Employee's pending work on behalf of Employer and the orderly transfer of any
such pending work to other employees of Employer as may be designated by
Employer. Employer shall be entitled to such full-time or part-time services of
Employee as Employer may reasonably require during all or any part of the 90-day
period following any notice of termination by the Employee. In such event,
Employee shall be compensated at a per diem rate equivalent to his previous base
salary with Employer.
SECTION 9 - CONFIDENTIALITY
All confidential information acquired by Employee during his employment
with Employer shall be regarded as confidential and solely for the benefit of
Employer.
SECTION 10 - ARBITRATION
In case of any dispute or disagreement arising out of or connected with this
Agreement, the parties hereto hereby agree to submit said dispute or
disagreement to the American Arbitration Association in Raleigh, North Carolina
for a resolution within 120 days after submission thereof by three arbitrators
to be designated by said American Arbitration Association. Any decision or award
by said arbitrators shall be binding, and except in cases of gross fraud or
misconduct by one or more of the arbitrators, the decision or award rendered
with respect to such dispute or disagreement shall not be appealable. In
addition, the prevailing party in such an arbitration proceeding shall be
entitled to recover his attorney's fees, all reasonable out-of-pocket costs and
disbursements, as well as any and all charges which may be made for the cost of
the arbitration and fees of the arbitrators.
SECTION 11 - SEVERABILITY
If, for any reason, any provision of this Agreement is held invalid,
such invalidity shall not affect any other provisions of this Agreement not held
so invalid, and each such other provision shall, to the full extent consistent
with law, continue in full force and effect.
SECTION 12 - ASSIGNMENT
Rights and duties of the parties hereunder shall not be assignable by
either party except that this Agreement and all the rights hereunder may be
assigned by Employer to any corporation or other business entity which succeeds
to all or substantially all of the business of Employer through merger,
consolidation, corporate reorganization or by acquisition of all or
substantially all of the assets of Employer and which assumes Employer's
obligations under this Agreement.
SECTION 13 - ENTIRE AGREEMENT
This Agreement supersedes all prior agreements between the parties
concerning the subject matter hereof and this Agreement constitutes the entire
agreement between the parties with respect thereto. This Agreement may be
modified only with a written instrument duly executed by each of the parties. No
person has any authority to make any representation or promise on behalf of any
of the parties not set forth herein and this Agreement has not been executed in
reliance upon any representation or promise except those contained herein. No
waiver by any party of any breach of this Agreement shall be deemed to be a
waiver of any preceding or succeeding breach.
SECTION 14 - GOVERNING LAW
This Agreement is made and entered into in the State of North Carolina,
and the laws of North Carolina shall govern its validity and interpretation and
the performance by the parties hereto of their respective duties and obligations
hereunder. This Agreement shall be binding upon the Employer and the Employee as
approved by the Board of Directors of the Employer at its regular meeting on
September 16, 1992.
SECTION 15 - HEADINGS
Section and other headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
WITNESS: EMPLOYER:
/S/ Xxxxxxx X. Xxxxxx, Xx.
----------------------------- By: /S/ Xxxxxxxx X. Xxxxx, Xx.
Xxxxxxx X. Xxxxxx, Xx. ---------------------------------
Xxxxxxxx X. Xxxxx, Xx.
Title: /S/
----------------------------
Chairman
EMPLOYEE: /S/ Xxxxxxx Xxxxxxxxx
---------------------------------
Xxxxxxx Xxxxxxxxx
